NEW YORK: Two of the world's largest communications holding
companies have made unprecedented moves to secure one of the largest PR
accounts in recent history.
Both Omnicom and Interpublic Group (IPG) are pooling a number of their
agencies to stake their claims on the IBM business, estimated to be
worth up to dollars 60 million.
Omnicom's Brodeur Worldwide - the incumbent on IBM's software, global
services consulting and personal systems business - is drawing on the
might of both Ketchum and Fleishman-Hillard. It is not clear who is
leading the joint bid, or whether new entities will be formed, but
participation spreads right up to the top of the organization. Tom
Harrison, CEO of umbrella division Diversified Agency Services, is said
to be involved.
Within IPG, TSI, the incumbent on IBM's technology, products and sales
areas, is joining sister agencies Golin/Harris International and Weber
Shandwick Worldwide. An IPG source confirmed that TSI will present the
tactical elements, with its siblings providing strategy.
IBM is cutting its PR agencies from 50 down to two or three to represent
three new divisions: research and technology, product and customer
While economies of scale are less obvious in PR than in other
disciplines, a source close to the review noted: "This is one of the
first times a client has been in a position to leverage pricing in the
PR industry." Pooled revenues of the Omnicom agencies come to dollars
464,110,000; IPG's total dollars 327,089,449.
Many Fortune 200 companies are regarding the IBM review as a bellwether,
with a mind to making the same drastic move. Though the majority of
global clients have consolidated advertising, media planning and buying
and direct marketing, PR has lagged behind.
Procter & Gamble is said to be considering the move. A senior P&G agency
source confirmed, "P&G has discussed the possibility."
- See Editorial, p.8.