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The movers and shakers of media consolidation

The movers and shakers of media consolidation
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First Published: Tue, Mar 11 2008. 07 57 PM IST

Marion Arathoon
Marion Arathoon
Updated: Wed, Mar 12 2008. 03 15 PM IST
Marion Arathoon
You have to hand it to Vincent Bolloré, chairman of French communications group Havas, which also owns media network MPG. He remains a suitor of Aegis Group Plc.—the parent company of the Carat media network—despite repeated rejections. International media reports say he is making a fresh bid to acquire Aegis and has plans to merge it with Havas, though a Havas executive has told Reuters that this is “ill-informed speculation”.
And you have to hand it to Sam Balsara, founder of India’s only remaining independent media specialist Madison Communications Pvt. Ltd. Thanks to Madison’s respected brand image, prestigious accounts and handsome billings, he has been courted for years by every global holding company aspiring to ramp up scale here, and has rejected all overtures. Mint recently reported that WPP Group Plc.’s media specialist GroupM may be seeking to buy a stake in Madison through Mediacom Pvt. Ltd, and that the two companies (Mediacom and Madison) have jointly pitched for the media planning and buying business of Procter and Gamble Co.’s India arm. There is, however, no comment from either side.
Bolloré and Balsara. One takes the nays and one gives them. One is a global mover and the other, more local. Should the bids succeed, media buying will become even more consolidated here. GroupM and Madison, together, will command 50%-plus of the media buying market here. That gives them the kind of bargaining muscle that, media owners fear, could hammer down ad rates further. In contrast, Bolloré’s global moves would have limited impact here. Even if the media buying forces of MPG and Carat should join hands in India one day, the resultant scale would not cause too much of a ripple in the market.
One mega media consolidation is still due. OMD was launched last year as an independent media specialist under Omnicom Group Inc., and handles brand portfolios such as Johnson and Johnson, Ambuja Cement and Parle Agro. While the media buying departments of Omnicom ad networks have been merged under OMD in various markets, this merger has been stalled here due to various legal issues, say media buyers who did not wish to be identified. Omnicom does not fully own any of its local ad agencies here yet, and the absence of no-objection certificates from minority shareholders could stall new and merged operations, they add. Jasmin Sohrabji, managing director, OMD, when asked about legal issues before the company, said: “I am not at liberty to talk about this.” She, however, said the amalgamation of Omnicom agencies’ media buying departments under OMD could happen one day.
Marion Arathoon is Mint’s advertising editor.
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First Published: Tue, Mar 11 2008. 07 57 PM IST