Publicis-Saatchis buyout heralds dawn of age of 'super agency' networks

<p>Publicis' recent acquisition of Saatchi & Saatchi will likely spur </p><p>on yet more mergers and acquisitions within the worldwide advertising </p><p>scene until there are only a handful of super agency networks, senior </p><p>regional advertising executives have said. </p><p><BR><BR> </p><p>Most said that the M&A frenzy was due to global agency networks </p><p>scrambling to be one of the few big players and avoid being left behind </p><p>as a mid-size organisation. </p><p><BR><BR> </p><p>"Ultimately, there will be a small number of big guys, lots of little </p><p>ones with very few in between," said one industry executive, who spoke </p><p>on condition of anonymity. </p><p><BR><BR> </p><p>"That's because mid-sized networks usually have a harder time of it </p><p>through not being large enough to compete with the big guys in terms of </p><p>resources and not being flexible enough to compete with the smaller </p><p>ones." </p><p><BR><BR> </p><p>The impetus for the M&A activities was that clients themselves were </p><p>involved in buyouts and mergers in order to cover more ground on a </p><p>worldwide scale with greater cost efficiencies, the agency executives </p><p>said. </p><p><BR><BR> </p><p>In addition, the Internet, the further opening up of China through its </p><p>expected entry into the World Trade Organisation and the recovery of the </p><p>Asia-Pacific markets have meant that clients, especially in the West, </p><p>are increasingly looking at opportunities in this region. </p><p><BR><BR> </p><p>"They must get in touch with local culture and insights and the best way </p><p>to do this is to work with an agency group with the resources in place </p><p>globally," added Saatchis regional CEO Patrick Pitcher. </p><p><BR><BR> </p><p>"If you look at Coca-Cola, they have stopped talking about global </p><p>advertising, because in this more sophisticated world, there is a danger </p><p>of operating at the lowest common denominator." </p><p><BR><BR> </p><p>And as JWT Asia-Pacific COO Kevin Ramsey puts it, the bigger an </p><p>organisation, the more it will need from an agency network's </p><p>wide-ranging capabilities, such as knowledge, best practices, </p><p>efficiencies and suppliers, on a global, regional and local scale. </p><p><BR><BR> </p><p>While most of the region's top ad executives believed that the recent </p><p>spate of mergers and acquisitions were client driven, newly-installed </p><p>Grey Worldwide Asia-Pacific president Eric Rosenkranz said this wasn't </p><p>entirely true. </p><p><BR><BR> </p><p>"If you acquire disciplines that complement your existing network then </p><p>that's the right way to go, but if it's not then I am afraid that it's a </p><p>simply a means by which the parent company can raise its bottom line and </p><p>look good at the next stockholders' meeting," he said. </p><p><BR><BR> </p><p>Over the past year, there have been a number of new alliances struck: </p><p>FCB and Bozell; Dentsu, the Leo and McManus groups to form BCom3; WPP </p><p>and Y&R which created the world's biggest communications group; and now </p><p>Publicis and Saatchis. </p><p><BR><BR> </p><p>Publicis Asia-Pacific's regional director Guillaume Levy-Lambert said </p><p>the acquisition of Saatchis was aimed at giving even better quality to </p><p>clients. </p><p><BR><BR> </p><p>"We are ideas networks that have the ability to come up with new ideas </p><p>and that combined with creative and strategic will benefit our </p><p>clients. </p><p><BR><BR> </p><p>"Together our positioning is 'Ideas with La Difference'," he said. </p><p><BR><BR> </p><p>It's believed that Publicis is aiming to beef up its global creative </p><p>credentials. </p><p><BR><BR> </p><p>Paris-based Publicis itself is highly-regarded in Europe while Saatchis </p><p>is a leading force in Asia-Pacific. Publicis has also acquired the </p><p>creative hot shops of Hal Riney & Partners and Fallon McElligott in the </p><p>United States. </p><p><BR><BR> </p><p>Both Publicis' Mr Levy-Lambert and Mr Pitcher of Saatchis said both </p><p>networks will not merge and will continue to operate independently. </p><p><BR><BR> </p><p>"It's business as usual," Mr Pitcher said. </p><p><BR><BR> </p>