Asia yet to feel impact of global M&A activities

<p>The global mergers and acquisitions activity is continuing with the </p><p>reported tie-up between WPP and Y&R, however, they have yet to </p><p>significantly impact advertising operations in Asia since different </p><p>agencies within holding groups still run as separate entities. </p><p><BR><BR> </p><p>This is because most of the horizontal mergers are aimed at </p><p>strengthening capital and holding assets of the head company. However, </p><p>the mergers have altered the business landscape, especially in terms of </p><p>media planning and buying. </p><p><BR><BR> </p><p>The merger talks between UK-based WPP and US-based Young & Rubicam (Y&R) </p><p>initially fell through because of a divergence in terms and </p><p>conditions. </p><p><BR><BR> </p><p>As soon as those talks collapsed, a relatively smaller player, the </p><p>French advertising group, Publicis started negotiations with Y&R for a </p><p>possible tie-up. </p><p><BR><BR> </p><p>In the end, however, Y&R and WPP resumed discussions and struck a deal </p><p>after both sides resolved management differences. </p><p><BR><BR> </p><p>The deal is pending final approval from major shareholders and </p><p>clients. </p><p><BR><BR> </p><p>However, there will likely be little change to the way each agency runs </p><p>its Asia-Pacific operations. </p><p><BR><BR> </p><p>The real impact for these consolidation lies in increasing the network's </p><p>clout in media buying and specialised communications disciplines in PR, </p><p>direct marketing and interactive services. </p><p><BR><BR> </p><p>The bigger the umbrella conglomerate, the wider the scope of services </p><p>offered and the greater bargaining power in media buying, powerful </p><p>weapons in retaining existing clients and pitching for new accounts. </p><p><BR><BR> </p><p>Meanwhile, the newly-created holding advertising conglomerate BCom3 has </p><p>vertically merged the Leo and MacManus groups' media brands, Starcom and </p><p>MediaVest respectively, to form Starcom MediaVest Group (SMG). </p><p><BR><BR> </p><p>The merger, however, will not happen in North America, the UK, Brazil </p><p>and Puerto Rico. </p><p><BR><BR> </p><p>Global media clout is now the niche of mega advertising conglomerates in </p><p>luring clients. </p><p><BR><BR> </p><p>With a majority 20 per cent share holding of Dentsu, BCom3 has formed </p><p>PDS with the involvement of Phoenix Communications, Dentsu and Starcom </p><p>to serve Procter & Gamble's media business in Korea. </p><p><BR><BR> </p><p>In China, a similar media venture, Quest, was created to pitch for the </p><p>P&G account, and now runs its media business there. </p><p><BR><BR> </p><p>"We are responding to our clients' needs by offering a global media </p><p>solution that combines the resources of three organisations, including </p><p>Dentsu with its 25 per cent Japanese market share," said BCom3 CEO Roger </p><p>Haupt. </p><p><BR><BR> </p>