While this year's league table of media agencies contains many
interesting stories, perhaps the biggest surprise is that the industry
is yet to see the flurry of mergers predicted in the past couple of
Starcom's merger with Motive pushed the new firm to number three in our
chart, and an imminent marriage between Western and Initiative is
But talk of mergers between Zenith and Optimedia, Mindshare and The
Media Edge, and Starcom Motive and MediaVest, continues to be
speculative. Nevertheless, consolidation in ITV and some key account
moves have brought the prospect of mergers closer.
Once again, Zenith leads the pack, even though it lost the pounds 15m
BMW buying business in a head-to-head pitch against Carat for the car
giant's pounds 100m European account. Despite that, account wins such as
the pounds 14m full service Scottish Widows and the pounds 27.5m press
and radio account for BT Cellnet kept up Zenith's forward momentum.
Lack of European firepower was cited as a key reason for Zenith's BMW
loss, but that may be less relevant now Publicis has acquired one of
Zenith's 50% owners Saatchi & Saatchi. That deal led to suggestions that
Zenith might be merged with Publicis buying arm Optimedia.
Room enough for two
Although such a marriage would ward off the threat of Carat overtaking
Zenith in the billings race, Optimedia chairman Simon Lloyd has rejected
suggestions that a merger is on the cards, claiming there is room for
both brands on a worldwide basis. Currently, a closer relationship looks
unlikely, given Zenith's fury at Publicis' decision to switch pounds
68.7m of global Hewlett-Packard business out of Zenith into
The shining star of the league table is Carat, which bounded back from
losing pounds 25.5m of Nissan business to Manning Gottlieb Media by
picking up BMW, PSA's Peugeot-Citroen account (with sister agency BBJ)
and, most recently, Renault. It is quite possible Carat will clinch pole
position in next year's table, even excluding the pounds 124m billings
that flow through BBJ.
Carat UK new business director William Corke says the agency's
independence from full-service networks continues to be a strength. But
he believes its planning credentials have been underestimated. Retaining
the Arla Foods account, winning pounds 15m Group Danone and poaching
Burger King's planning from MindShare underline the point that Carat is
not just about scale, he says.
The company's portfolio management skills are endorsed by it winning
pounds 60m of pan-European Louis Vuitton Moet Hennessy (LVMH) business
from Initiative, he adds. And pounds 27m of press billings from Tiny was
also a healthy lift.
In spite of all the talk about mergers, Corke points out that 'having
two front doors' has its advantages. Carat's close relationship with BBJ
has allowed it to get round the potential conflict between its PSA and
Renault business - at least in the short term.
Starcom Motive's climb up the table is due to its merger - but the good
fit between the two operations and the smooth nature of the merger has
impressed observers. Account wins include the pounds 24m Lego European
task, pounds 7m Dr Martens planning and buying brief and the pounds 7m
P&O Cruises buying account. The agency is also notable for wins such as
HFC Bank's Marbles, CitySnake.com and WAP service provider iTouch.
MediaCom TMB has been bedding down business this year after clinching
the pounds 80m VW task in 1999. MediaCom wins this year include the
pounds 4.7m De Agostini, pounds 4m Greene King and pounds 1m planning
and buying for Bahlsen's biscuit brands.
MediaCom was a major beneficiary of the dotcom boom, with briefs for
ShopSmart.com, Multimap.-com,and the pounds 15m account for Direct
Line's online car dealing service, jamjar.com. Although not included in
this table, MediaCom's UK business is also in line to add billings,
thanks to its US office, which has won pounds 68m global planning and
buying for Unisys.
This year saw a corporate rebranding for Omnicom subsidiary Optimum
Media Direction (OMD), which in last year's table was prefixed by BMP:
13% year-on-year growth made it the second fastest growing business in
the top ten behind Carat.
Unlike Carat's Corke, OMD's new business director, Mark Dickinson, sees
benefits in being plugged into a family of agencies across a variety of
disciplines. He stresses that OMD's business is not reliant on the
success of creative sister agency BMP, but he believes it gives OMD an
edge over its rivals. 'We have a deep-rooted understanding of the
full-service culture which Zenith or Carat don't possess. I think that
makes us less process-driven.'
Family relationships have converted into business. OMD UK's pounds 21m
AXA win was enabled by sister company WWAV's involvement in AXA's FA Cup
Among OMD's big wins, Dickinson singles out pounds 46m Hasbro and the
pounds 27m centralisation of Reckitt Benckiser. Winning the COI's radio
business in July also confirmed the agency's credentials in that medium
- where it is now clear number one.
Putting the Boots in
Despite a good year, OMD had its own trauma when top-level intervention
by WPP chief Martin Sorrell helped MindShare snatch the pounds 60m Boots
It is a blow, admits Dickinson. 'But the market can be assured that we
will be out there, aggressively going after a new piece of retail
business to replace Boots.'
Although not included in our table, it is worth noting that almost equal
in billings with OMD is 'direct' (in-house buying), which grew by
MindShare dropped a notch to sixth because of the Starcom Motive deal.
Its setbacks tended to be failures at pitch stage, rather than outright
losses. Accounts it might have been expected to win included the
National Dairy Council, Energizer, Burger King and Marks & Spencer.
But these disappointments have been offset by wins such as the pounds
124m BP Amoco account, pounds 37m of which comes under the UK. MindShare
also secured pounds 7m Bass Restaurants and the media task for Richard
Branson's People's Lottery.
Its failure to pick up M&S was surprising. But when next year's figures
are calculated, this will be offset by a pounds 60m Nike pan-European
account win in October and the pounds 60m Boots account, neither of
which register in the table.
Universal McCann saw a dip in billings after rapid growth in 1998 and
1999. But the fact that it lost less business than Initiative means it
jumps ahead of its IPG-owned rival. Universal's key wins included
Goodyear (pounds 33m) and more Coca-Cola business for Dr Pepper, Oasis
and Canada Dry (pounds 9m), although this was later offset by Coke's
decision to hand all planning and non-TV buying to BBJ.
Like MindShare, Universal promotes the benefits of being part of a
full-service global group, McCann-Erickson Worldwide (MEW).
Repositioning the company for global expansion last autumn, MEW chairman
and chief executive John Dooner said: 'Our goal in launching Universal
McCann globally is to create the next generation of media practice, one
that will elevate the role of media within the brand-building
Initiative dropped by 12% with the loss of PSA and LVMH to Carat. The
pressure for a merger with IPG sister agency Western (also down 8%) has
become intense, particularly since the two brands have already unified
in a number of countries.
The major stumbling block to a UK merger had been the PSA account's
conflict with Western's Vauxhall business. With that out of the way, a
merger is now imminent.
As a combined force, they might squeeze into the top five next year -
presumably a benefit in a size-obsessed market.
Despite its setbacks, Initiative UK picked up some impressive business,
such as the pounds 13m task of launching an online banking venture
supported by Merrill Lynch and HSBC, and the pounds 5m Selftrade win.
Initiative also clinched two pounds 25m pan-European accounts for drink
brand Energizer and a new Carphone Warehouse e-commerce portal.
New PHD, long regarded as one of the sector's most creative agencies,
saw a dip in billings but did pull off key wins such as British Midland,
BeautySpy, Letsbuyit.com, Lastminute.com and London Transport.
In a climate of merger talks, it was inevitable that Omnicom would
consider merging PHD into the OMD fold. But strong internal resistance
persuaded it to give PHD an enhanced role instead. In March, it was
revealed that under new PHD chief executive David Pattison, the PHD
brand would be developed internationally in parallel to OMD.
MediaVest's year started with the pounds 21m loss of Mars. A pounds 10m
election task for the Tory party was counter-balanced by a pounds 4m COI
planning account on behalf of the Department of Social Security.
MediaVest also picked up pounds 11m Bristol Myers, pounds 5m Associated
New Media and pounds 5m Tetley's and some dotcoms (Kitbag.-com's pounds
3m and Attenda's pounds 5m).
After 10% growth in our league table, MediaVest positioned itself well
for next year by defending key pieces of business including COI's pounds
90m TV buying task and the pounds 45m Scottish Courage account in the
face of stiff competition. The Foster's and John Smith's brands are the
big element of this primarily TV-based task.
There is a sharp drop in billings after MediaVest to Optimedia.
Optimedia's billings for the period under analysis grew by 6% and the
agency managed to retain 11th place, despite being leapfrogged by
Starcom Motive. But it lost pounds 80m of Renault business to Carat in
September (a fact not registered in these figures). Although Optimedia
has most of next year to regain ground, it must work hard to gain on the
sector's Premier League. Wins including pounds 6m Tommy Hilfiger and the
media business for the European Central Bank, for which the value is not
known, the pounds 17m UK Hewlett Packard task (not included in these
billings), and the agency's ongoing aggressive marketing drive should
help it to do just that.
The companies that Optimedia heads in this table fall into two clear
camps: those that have experienced downward momentum and those with
wings on their heels. After a shattering end to the past decade, CIA UK
at number 14 (down four) has stabilised under new chief executive David
The acquisition of brand strategists Added Value by parent group Tempus
gives CIA an extra string to its bow to help it out of the woods.
Highlights included pounds 7m of Gap business, the pounds 3m World
Online launch, a pounds 15m task for Halifax internet bank IF.com and
the pounds 4.5m HFS campaign picked up by CIA Manchester. On the debit
side, the loss of pounds 20m CGNU to MBS Media was a bitter blow while
there is talk that CIA may see pounds 6m of SmithKline Beecham (SB)
centralised into rival MediaCom TMB.
Above and below CIA are more of this year's star performers. Media
Planning Group (previously known as Mediapolis) at number 12 picked up
the pounds 22m centralised account for Thomson Travel and the pounds 10m
Ask Jeeves business.
A highly impressive year for Manning Gottlieb Media saw it team up with
sister agency OMD to snatch the pounds 125m Nissan European planning and
buying task from Carat. In a strong start to the year, MGM also picked
up National Power's pounds 20m launch of utilities brand Npower. One
blip in an otherwise storming year was the loss of Dr Martens to Starcom
Motive. In addition this year's table does not include the loss of the
Nike account to MindShare.
In any other year, MGM's 25% leap in billings would probably be the best
performance. But Walker Media's 31.5% surge is also highly
Christine Walker has lost none of the respect among clients that she
built up while at Zenith. With a team spearheaded by the likes of Phil
Georgiadis and John Horrocks, the company is proof that some clients are
as likely to be swayed as much by quality personnel as by arguments
about market clout. Georgiadis says the agency's growth has been the
result of its focus. 'We have short lines of control between senior
management and our clients and we aren't distracted by discussions about
mergers and international politics.'
Picking up pounds 6m Mothercare.com and pounds 8m Freeserve were good
wins for Walker.
But the agency's pounds 21m Marks & Spencer win was proof that the
company is a force to be reckoned with. Georgiadis is also proud that
the company made it on to the Scottish Courage shortlist - another sign
For Georgiadis, the next test of maturity will be how the company
performs when it has to fight to hold on to business that it has been
winning since its launch.
For now, Walker's independence is a real point of difference. But for
all the companies from Optimedia down to Western in this chart, there is
an underlying question about whether their position as smaller agencies
is sustainable in the long-term and to what extent they will need to
grow to survive. Western's last year as a standalone agency saw it pull
in some big recent wins including the pounds 10m launch of US online
retailer Priceline and the pounds 3m Emap Online business.
In the last leg of our table, 17th-ranked BBJ, under new managing
director Trista Grant, is recovering fast from the loss of pounds 80m VW
business last year.
Alongside Carat, it won the pounds 74m PSA task and, following Carat's
Renault win, will be looking after the entire account. Dotcom wins
include pounds 7m Lycos, pounds 5m 365 and Moneygator.
com, while pounds 11m Bertelsmann Music is another highlight. As
suggested earlier, BBJ is unlikely to be merged into Carat because it is
a useful foil for the main agency.
Our highest new entry at number 18 is The Allmond Partnership - whose
work on behalf of BT is a core part of its billings.
Another newcomer at 20 is Leeds-based Brilliant, the result of a merger
between DMS and Media Lane. Wins this year led to a 42% boost in
billings and included pounds 3m of business from debt management group
Baines & Ernst, pounds 8m Claims Direct and pounds 2.5m Churchill
Squeezed in between TAP and Brilliant at number 19 is sector stalwart
MBS Media, which has inched up five places in the past two years.
In addition to the CGNU centralisation, its big coup this year was the
pounds 4m MGM Home Entertainment job. The purchase of MBS Media by True
North will see it merge with Banks Hoggins O'Shea's inhouse media arm to
create a company with claimed billings of pounds 210 m.
Aside from mergers, one major phenomenon to watch out for in next year's
table will be the impact of retreating dotcom expenditure. This should
curtail the number of odd-sounding account wins in the press. Another
trend to monitor is whether Sorrell's Boots deal triggers a new wave of
top-level package deals.
There is also a chance that Scotland's Feather Brooksbank might break
into next year's table. Having been acquired by Carat and merged with
Carat Manchester in late 1999, it immediately picked up pounds 10m of
planning and buying from the Bank of Scotland. It lurks just outside our
table at number 22.
TOP 20 MEDIA AGENCIES
Sep99-Aug00 Sep98-Aug99 %
(pounds) (pounds) Change
1 Zenith Media 598,250,611 582,061,840 2.8
2 Carat 525,328,491 446,204,245 17.7
3 Starcom Motive 421,874,861 392,113,201 7.6
4 MediaCom TMB 395,581,724 367,377,590 7.7
5 OMD UK 391,007,178 345,391,731 13.2
6 MindShare 383,723,993 363,289,319 5.6
7 Universal McCann 325,830,456 333,175,216 -2.2
8 Initiative Media 307,356,890 352,380,621 -12.8
9 New PHD 296,099,664 302,583,314 -2.1
10 MediaVest UK 292,081,056 263,656,362 10.8
11 Optimedia 225,750,015 212,104,853 6.4
12 Media Planning Group 181,609,295 161,983,726 12.1
13 Manning Gottlieb Media 166,445,512 132,849,956 25.3
14 CIA UK 165,554,878 163,546,415 1.2
15 Walker Media 161,765,471 122,968,988 31.5
16 Western 140,582,544 153,452,996 -8.4
17 BBJ 124,019,001 113,259,353 9.5
18 The Allmond Partnership 88,668,174 92,492,386 -4.1
19 MBS Media 75,485,857 73,410,386 2.8
20 Brilliant 68,033,997 47,640,057 42.8
Source: ACNielsen MMS