Omnicom group to swallow AMV

Omnicom’s announcement to the Stock Exchange last week that it plans to take control of Abbott Mead Vickers BBDO has implications beyond its directors becoming multi-millionaires. AMV is arguably the country’s most successful advertising agency and counts the likes of BT, Sainsbury’s and Volvo among its blue chip client list.

Omnicom’s announcement to the Stock Exchange last week that it

plans to take control of Abbott Mead Vickers BBDO has implications

beyond its directors becoming multi-millionaires. AMV is arguably the

country’s most successful advertising agency and counts the likes of BT,

Sainsbury’s and Volvo among its blue chip client list.



If the pounds 350m bid is accepted - which observers expect before

Christmas - Omnicom will control three of the UK’s top ten advertising

agencies with combined billings of pounds 781m. This means that the

group’s agencies, TBWA GGT Simons Palmer, BMP DDB, plus AMV, would

control 19% of ad campaigns produced by the top 30 agencies.



Omnicom would therefore overtake WPP, which bills pounds 507.4m through

J Walter Thompson and Ogilvy & Mather, as the largest ad agency group in

the UK.



Omnicom, the giant US communications group, has owned 27.7% of AMV via

its BBDO network since 1991. Therefore, beyond the agency changing its

name to BBDO Abbott Mead Vickers, many feel that the deal is merely

formalising the relationship.



’The companies have had years of working together, with a lot of

European BBDO work being handled by the London agency - Compaq being a

recent example.



There won’t be a shift of power as a result of the deal. It just means

that after years of going to bed together, they’re now getting married,’

says industry analyst Lorna Tilbian at Panmure Gordon.



But some clients disagree. Andrew Marsden, marketing director of

Britvic, whose Pepsi brand is handled by AMV, says maintaining

creativity and the same level of service is always an issue after a

takeover.



’What you’re buying from an agency is relationships and understanding

built up over time. This inevitably changes when new management comes

in. There’s nothing more frustrating for clients than receiving a letter

from an agency post-buyout, saying ’don’t worry, nothing’s going to

change,’ - that’s absolute rubbish,’ he claims.



There is also the question of corporate culture. AMV’s three founding

partners, David Abbott. Peter Mead and Adrian Vickers, have been the

defining forces on the agency’s internal culture and creative work.

Abbott has retired, and there have been suggestions that the agency is

already missing his creative lead. A sell-out to Omnicom would

inevitably fuel suggestions that the M and the V in the agency’s name

would make way for new senior management.



However, the biggest changes, if the deal goes ahead, are expected below

the line. AMV owns direct marketing agencies Craik Jones and Barraclough

Hall, while Omnicom owns several shops through its Diversified Agency

Services (DAS) division including WWAV Rapp Collins and Claydon

Heeley.



AMV put in an offer for Claydon Heeley earlier this year but was outbid

by Omnicom.



Sources now expect there to be further rationalisation: ’As it stands,

it would be a fractured portfolio for Omnicom with several promotions

agencies and DM agencies. Both AMV and Omnicom are extremely successful

below the line so there will be issues as to how a realignment occurs.

It may be that a new ownership structure is drawn up,’ says a

source.



The deal also has implications for media. Omnicom currently owns BMP

Optimum, which ranks fourth in the market and Manning Gottlieb Media,

which is number 20. Through AMV it has a stake in New PHD, and would be

likely to seek consolidation of its group TV buying and negotiation

business.



OMNICOM’S UK AGENCY INTERESTS



ADVERTISING



TBWA GGT Simons Palmer



BMP DDB



Abbott Mead Vickers BBDO*



DIRECT MARKETING/SALES PROMOTION



WWAV Rapp Collins



GGT Direct



Tequila Payne Stracey



Claydon Heeley



Craik Jones Watson



Mitchell Voelkel*



Barraclough Hall Woolston Gray*



Clarke Hooper Consulting*



MEDIA



BMP Optimum



Manning Gottlieb Media



New PHD*



PR/PUBLISHING



Fleishman-Hillard



Countrywide Porter Novelli



Ketchum Life



Gavin Anderson GPC



Fishburn Hedges



Freud Communications*



Redwood Publishing*



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