Disney is holding what is likely to be the biggest media review of the year as it consolidates its advertising buying, following its acquisition of Fox’s entertainment assets, including the 20th Century Fox film studio in the US and the Star TV service in India.
Industry sources said Group M, WPP’s media buying division, is set to defend Star in India, where Mindshare holds the account, and some other Disney-related business elsewhere in Asia like the Hong Kong theme parks.
However, Group M is not expected to take part in Disney’s review in other parts of the world.
WPP is not expected to pitch for Disney’s estimated US$4bn (£3.2bn) global media planning and buying account outside Asia, as the agency holding group seeks to avoid conflict with other clients, notably Comcast.
Mindshare will not defend Fox in Europe
The decision means Mindshare is not going to defend Fox across Europe – an estimated £150m account that it has held since the end of 2016.
Disney has a huge portfolio, which includes TV, film and theme-park assets, and observers believe it could end up using a number of agency groups rather than consolidating all of its spend within one company.
The company is using MediaLink to advise on the review and Campaign reported in June that it sent out an RFP to agencies, requesting proposals for three regions – the Americas, Europe and Asia-Pacific.
Omnicom’s OMD is the major incumbent on Disney’s account. Dentsu Aegis Network, Publicis Media and WPP are leading incumbents on Fox.
Disney plans to make cost savings and has told investors to expect $2bn in "synergies" across the business in the next two years, following the completion of the Fox takeover in March.
A number of senior Fox executives have already departed.
The enlarged Disney business, which owns some of the world’s top entertainment franchises including Star Wars, The Simpsons and Toy Story maker Pixar, spends an estimated $4bn a year on advertising.
Disney had $2.8bn of advertising expense last year before the completion of the purchase of Fox's entertainment assets, according to its annual report.
Fox reported advertising expense of $2.3bn in its annual accounts, before it sold about 60% of its assets to Disney while keeping roughly 40% of the business, including Fox News and Fox Sports.
Disney is also a leading media owner, largely because of its TV operations, and had almost $8bn in annual ad sales before the Fox acquisition.
Managing client conflict
It is thought that Group M’s relationship with Comcast, the owner of NBCUniversal and Sky, is a key reason behind the decision not to pitch for Disney outside Asia.
Essence handles media buying for NBCUniversal and MediaCom looks after Sky.
Group M faced a similar dilemma in 2017 when it decided not to participate in Amazon’s global media review because it wanted to avoid potential conflict with clients such as Google and Target.
Disney is gearing up to launch Disney+, a new video-streaming service, that will compete with new and existing players including Netflix, Amazon, Apple, AT&T and Comcast.
Omnicom is another agency group that has to manage client conflict carefully as it already handles media buying for Apple and AT&T, as well as Disney.
Disney and Group M declined to comment.