Bcom3 sets up Starcom MediaVest Group to manage media assets

<p>Bcom3 has launched Starcom MediaVest Group (SMG) to hold the Leo </p><p>and MacManus groups' media assets. </p><p><BR><BR> </p><p>SMG now ranks among the top three media services holding groups, with </p><p>global billings of US$16.5 billion. </p><p><BR><BR> </p><p>The media discipline is playing a more prominent role in the advertising </p><p>process amid growing complexity and fragmentation of media, according to </p><p>Mr Kevin Malloy, executive VP of SMG international and chief executive </p><p>of MediaVest North America. </p><p><BR><BR> </p><p>While both media owners and agencies are merging horizontally to enhance </p><p>their operations, a media agency's size and clout are the keys to </p><p>competing in an increasingly consolidated landscape. </p><p><BR><BR> </p><p>But merely having the size is insufficient; Mr Malloy said it was more </p><p>important for an agency to have resources and competitive packages. </p><p><BR><BR> </p><p>Three to four media operations will ultimately dominate the global </p><p>advertising scene, and Mr Malloy said: "We're sure to be well at the top </p><p>of the placing." </p><p><BR><BR> </p><p>"We have the industry's most powerful media assets in Starcom and </p><p>MediaVest, and when you factor in our alliance with Dentsu, the impact </p><p>of our combined scale puts us at the top of the global marketplace," </p><p>said Mr Bob Brennan, SMG's chief operating officer. </p><p><BR><BR> </p><p>Asked if SMG would ally with its majority shareholder Dentsu, Mr Malloy </p><p>said the decision would be up to Bcom3's board level decision-makers in </p><p>Japan. </p><p><BR><BR> </p><p>"How we will operate with Dentsu is restricted to discussions in Japan," </p><p>said Mr Malloy, who added that it was still in the early days of </p><p>negotiations. </p><p><BR><BR> </p><p>With bundling leading to bigger media budgets, Mr Malloy nevertheless </p><p>said he didn't forecast a downward spiral in media rates, as costs are </p><p>determined by the marketplace. </p><p><BR><BR> </p><p>In fact, media fragmentation has caused further consolidation among </p><p>media owners, as many media conglomerates now tend to sell their </p><p>subsidiary properties all at once. </p><p><BR><BR> </p><p>Starcom and MediaVest will merge under the holding umbrella of SMG, and </p><p>the combined entities will operate under the Starcom brand. </p><p><BR><BR> </p><p>However, Starcom and MediaVest will continue to operate independently in </p><p>North America and the UK, where SMG decided to keep both established </p><p>entities separate. </p><p><BR><BR> </p><p>Starcom and MediaVest are two established, enormous brands in those two </p><p>markets, where they are conscious of conflicting client issues as </p><p>well. </p><p><BR><BR> </p><p>In Brazil and Puerto Rico, the respective media operations of Leo </p><p>Burnett and D'Arcy Masius Benton & Bowles will not unbundle from the </p><p>full agency services, due to the countries' legal restrictions. </p><p><BR><BR> </p><p>SMG's existing consortia agreements in markets such as Taiwan, Italy, </p><p>Belgium, Germany and The Netherlands will continue to operate. Starcom </p><p>will maintain its partnership with New Wave in Taiwan, while the group </p><p>will evaluate its consortia deals in other markets. </p><p><BR><BR> </p><p>SMG has new plans for the region, and is open to further acquisition to </p><p>strengthen its services as well. </p><p><BR><BR> </p><p>Booming interactive media have forced media agencies to dedicate special </p><p>services to the 'Net, and Mr Malloy said SMG was looking at developing </p><p>its Internet services around the world. </p><p><BR><BR> </p><p>Since the launch of Bcom3, the three entities - Dentsu, the Leo and </p><p>MacManus groups - have formed several media ventures. </p><p><BR><BR> </p><p>In Korea, a three-way media venture, PDS (involving Phoenix </p><p>Communications, Dentsu and Starcom) was set up to handle Procter & </p><p>Gamble's media business. </p><p><BR><BR> </p><p>Last year, Starcom and MediaVest formed Quest to pitch for the P&G AOR </p><p>account and subsequently won the business in China. </p><p><BR><BR> </p><p>With these ventures driven by clients' needs, Mr Malloy said the group </p><p>may use the same strategy again, depending on client and market </p><p>situation. </p><p><BR><BR> </p>