The markets, which gave a seal of approval to the Publicis deal yesterday, are looking, once again, at the possibility of more consolidation in an industry where size is increasingly important to an industry looking to cut costs and offer clients more effective service.
The most likely and attractive target is Aegis Group, with its prize asset of Carat Media, the only global media-buying network that remains to be bought up.
Carat makes Aegis a highly desirable target for Havas Advertising, which has long been seeking to strengthen its media offering and now, in the light of its Parisian rival's moves, needs to more than ever. Last year, it lost out to the WPP Group in the bid for Tempus, which owned the CIA network.
The problem is, unlike B|Com3, which was privately owned, Aegis is listed, but analysts do not see Havas as the potential new home for Carat.
According to Lornia Tilbian, media analyst at Numis: "I would think that Havas, having not got Tempus, will not be at all happy to see Starcom absorbed by Publicis. However, I don't think Aegis shareholders would want Havas paper and so Aegis is more likely to be taken over by Omnicom or WPP."
Another potential problem is that Aegis CEO Doug Flynn has gone on the record in the past as a staunch believer in maintaining independence, but whether there is substance to this position is another matter. Tilbian says: "I don't think Aegis management are precious about their independence as they know the game's about maximising shareholder value."
After Aegis, there is the ailing Cordiant Communications. Ailing it might be, but its advertising network Bates is still a top 10 UK agency, unlike B|Com3's Leo Burnett and D'Arcy, neither of which makes ±±¾©Èü³µpk10's top 10.
Cordiant is a trickier proposition. Last year, which was difficult for all the advertising groups, was a disaster for Cordiant. Its share price tumbled as it issued several profit warnings. However, plunges in its share price tend to be followed by a rally, as the market takes a gamble on the takeover issue.
The real question is, however, which company would take it over? Its part-ownership of the Zenith Optimedia Group, in which it has a 25% stake, would have made Publicis a possible contender, but this latest deal makes that seem unlikely.
Grey Global, which owns Grey Advertising and PR network GCI, is the other global ad group whose future starts to look precarious, following the Publicis-B|Com3 deal. Should it consider the possibility of merging with Cordiant, for example, it would see some synergies, with both agencies working for British American Tobacco, Sony and Nokia, but would have to wrestle with potential client conflicts with Coca-Cola and Pepsi, McDonald's and Wendy's, and various healthcare brands.
Tilbian thinks that a tie-up with Publicis and Grey is a more likely outcome. "As for Grey, sharing P&G with Saatchis probably means that it will eventually end up there," she says. This would leave Cordiant to tie up with Havas.
Shares in Cordiant, Aegis, Grey and Havas were up yesterday, although by this morning, the market was looking at them with less certainty -- no doubt influenced by falls across the board in US markets on Thursday.
What is certain is that there is yet more consolidation on the cards for the advertising industry, but as the possible combinations are not so obvious, the question remains over how much sense further consolidations will make for the clients involved.
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