Publicis set to establish joint buying operation

Publicis is preparing to form a UK joint buying operation, which could take in its Starcom, Starcom Mediavest and ZenithOptimedia buying brands, which insiders say could happen by the summer of 2006.

The move would be a bid to combat the power of WPP's recently fully formed Group M operation. Starcom UK group trading director Chris Locke is being tipped to head a Publicis pooled buying operation.

It would propel Publicis into second place in pooled buying power in the UK. According to Nielsen Media Research data for 2004, Group M would have had combined billings of £1.5bn, followed by Publicis with £1.3bn, Omnicom with £1bn and Interpublic Group with £0.9bn.

Although Jack Klues, the chairman of Publicis Groupe Media, was unable to confirm a date for the launch of the combined operation, or even that a decision had been taken, he did confirm that preliminary discussions on the matter had taken place.

He said that Publicis has been exploring pooled buying operations in a number of markets, including the UK. He added that it was "maybe inevitable in markets where moves by the competition required that Publicis offered our clients the same kind of scale (in buying) as the competitors."

Such a decision would be taken in the interests of clients, rather than Publicis. "Among some clients, consolidation is seen as an internal benefit to the agency in terms of improved efficiencies, rather than efficiencies on their behalf. We are motivated to provide the best service to clients, so a decision (on pooled buying) can't be taken quickly."

However, insiders say a decision to proceed is sure to be taken next year. The move will retain the three separate brands in the UK with their separation of clients on all issues outside of top-level media buying. It would likely replicate Group M's operation, rather than the pooled buying models followed by Omnicom's Opera or Interpublic Group's Magna Global. One Publicis insider claimed the two latter models "hadn't worked".

Two weeks ago, WPP brought forward the introduction of Mediacom into Group M from January, so that Group M could flex the full might of its muscle in the ongoing TV trading negotiations for 2006. A management structure was announced recently with MediaCom group chief executive Stephen Allan appointed chief executive of Group M, Mediacom broadcast director Mark Collins becoming managing director, broadcast, and MindShare investment director Nick Theakstone installed as chief operating officer.

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