Supergroups formed by IPG, Omnicom in the battle for IBM

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.

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