European Agencies: Tremors at the top

Recma's latest 'vitality' rankings accuse Carat of low competitiveness in its home market of France. Is this a sign it's losing its dominance in Europe? Recma has released its latest "vitality" rankings of the global media networks and, as usual, the results are likely to start a heated debate.

As well as its billings and rankings based on wins and losses, the French research group has invested more of its own judgment into gauging agency performance. Was the business won via a pitch or was it merely a shoe-in? Is the client Coca-Cola or Poundstretcher?

The result is a "vitality" grading, a rather elaborate way of describing a network's competitive strength.

The big story for Europe's big five markets is the lowly position of Carat.

Its peers often moan that Recma favours Carat because of its powerful French connections. No evidence of favouritism here. The irresistible force of European media for almost four decades is ranked fifth overall, level with MPG and Starcom, whose billings combined are dwarfed by Carat's $10 billion buying volume.

A bad year in the UK, where it lost Abbey National and Cadbury, is partly to blame. But worse was in its home market. It not only lost the retail giant Carrefour, but Bruno Kemoun and Eryck Rebbouh, the joint chief executives of Carat France, left after a row with the Aegis chief executive, Doug Flynn. Two big reasons, Recma says, for Carat's dismal C in France.

To say that an agency with a 27 per cent market share in France, billing $3.25 billion, is showing "low competitiveness" is some hammering. Carrefour was worth £120 million globally, but Carat's C is about Kemoun and Rebbouh, known in media circles as "the twins".

Proteges of the Carat co-founder Gilbert Gross, their loss is seen as a big blow.

Influential and well-connected, key international clients are said to be exposed without them.

Jerry Buhlmann, the chief executive of Carat International, who succeeded them as the head of Aegis Media Europe, plays down their departure. "We have a thousand people working at Carat France. Two people leaving shouldn't make a difference. We have the brightest talent in the French market taking their place."

Laurent George, 44, became the chief executive of Aegis Media France and Henri Le Menestrel, 35, was appointed as the president of Carat France.

Both were internal promotions. Philippe Bourguignon, the former chief executive and saviour of Euro Disney, was appointed as Aegis Media France's chairman.

A boost of fresh thinking could be the shot in the arm Carat needs, but it's a big risk. "If it starts to lose business this year, a lot of pressure will fall on young shoulders," one insider says. "The problem is that this team has only been there while things have been good. As the going gets tougher, will they hold their nerve or start squabbling and firing each other?"

International expansion and Aegis' launch of Vizeum are blamed for diverted talent and resources from Carat. And the market is a different place to the halcyon days of 1999 and 2000 when it seemed Carat could win a pitch just by turning up. It was then, rivals admit, the only choice for advertisers looking for a genuine European network.

"Carat single-handedly shaped the European media landscape," Colin Gottlieb, the chief executive of OMD Europe, admits. "I for one am happier and richer for what they created (the media independent scene). But champions are champions for a time, then others come along to challenge them."

OMD is Carat's closest rival, topping the vitality rankings. The network, a disjointed bunch of agency media departments before Gottlieb was hired to piece it all together in 2001, won McDonald's, Allianz, PepsiCo and easyJet across the region, Bacardi in Germany, BAT in Spain and Wrigley in France.

There were losses, especially in Germany (H&M, Coty, Wella and others), but most concede that OMD is currently the network to beat in pitches.

"We have a great team and aren't frightened of anyone," Gottlieb insists. "We go into every pitch wanting a punch-up and clients are buying into our hunger."

Other engines are firing in Europe too, but there are still worrying holes in their networks that could prevent them from doing Carat serious damage this year.

MediaCom's strength in Germany and the UK is let down by its near non-existence in southern Europe. Mediaedge:cia is fast improving but its dominance in Italy embarrasses its UK presence.

Likewise MPG. A Titan in Spain, where it won VAESA (Volkswagen and Audi) which MediaCom has everywhere else, but weak in Germany, Italy and the UK. And MindShare, loving life in Italy and the UK (Boots aside), but in need of bulking up in France and Spain.

That the networks are forging cosier ties with their siblings to plug the gaps is well known. WPP's MindShare and MEC, Interpublic's Universal McCann and Initiative, and increasingly Publicis' ZenithOptimedia and Starcom, are working ever closer to take on Carat.

The mid-sized groups' networks, Grey's MediaCom and Havas' MPG, supposedly pose less of a threat in a size-obsessed market. Yet MPG's win of Air France's global media three weeks ago was another chance for it to confound the doubters.

Many feel the major threat to Carat will come from wherever Kemoun and Rebbouh resurface. Sir Martin Sorrell has the twins' signature to help him launch a third WPP media network. This is thought to be made up of the second-string agencies of MindShare and MEC, although the positioning, as yet, is unclear.

But what would he buy? A bid for Carat's parent, Aegis, sounds ridiculous, but is not impossible - although it is expensive and will have to be considerably weakened before the price is right.

Despite the doom-mongering and poor Recma ranking, Carat is still in a strong position. It has a 14 per cent share of Europe's media market, a big lead over OMD with 9.5 per cent, and is still converting more than 20 per cent of pitches.

And Buhlmann has a message for the detractors. "A client recently said to me, 'you only have to step up half a gear to create a lot of daylight between you and your competitors again'. It's a big mistake if anyone thinks we are weakened and are no longer any good." Fighting talk.



A+ Initiative MPG OMD

A Carat MediaCom OMD Carat MEC

MediaCom Naked Zenith MediaCom MPG

TKM Starcom OMD UK Group MEC

Zenith Starcom Motive Muraglia

Starcom Calzolari

MediaVest OMD

B+ Initiative MG OMD MediaCom MindShare Carat

MEC MindShare MEC Universal Iceberg

OMD Walker Media Universal McCann Media

Vizeum Zenith McCann Vizeum Starcom

Vizeum Zenith

B MindShare Carat Initiative Media Italia MediaCom

MPG MEC MindShare MPG MindShare

Schmitter Universal Starcom Optimedia

McCann Strategia Vizeum

Vizeum & Media


C Universal MPG Carat Initiative Initiative

McCann PHD Starcom Universal

MPG McCann

Key: A+: Excellent. The agency has won many high-profile accounts

without major losses.

A: Good. Some big wins with few or no losses.

B+: Satisfactory. On balance, wins slightly outweigh losses.

B: Average. Account wins balance out losses.

C: Low competitiveness. Clear deficit between accounts won and lost.

For further explanation of Recma's methodology go to


Media agency Billings in top 'Vitality'

group five Europe ranking in top

(dollars million*) five Europe

Aegis Media 9,960 Carat 5

(Carat, Vizeum) Vizeum 8

OMD 5,600 1

MediaCom 5,450 2

Mediaedge:cia 5,025 3

ZenithOptimedia 5,025 4

MindShare 4,525 9

MPG 4,060 5

Starcom 3,575 5

MediaVest Group

Initiative 3,550 9

Universal 2,990 10


PHD 650 11

*Recma estimates, April 2003 for Germany, the UK, France, Italy and

Spain. Recma defines billings not as the buying volume but as the whole

of a media agency's activity including planning and diversified


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