The media-buying universe got a little smaller last week with the merger of the sixth- and seventh-largest ad-agency holding companies, Paris-based Publicis and Chicago-based Bcom3, respectively, for a little more than $3 billion.
Publicis is the surviving company and becomes the fourth-largest agency holding company in the world (behind Interpublic, WWP and Omnicom) but the second-ranked media-buying concern (behind Interpublic).
The merger would put under common ownership Chicago-based media buyer Starcom MediaVest, a unit of Bcom3, and both Zenith and Optimedia, the media-buying units of Publicis.
The combined national TV billings of Publicis and Bcom3 are estimated to be about $7.5 billion, behind the combined billings of Interpublic Group's buying units (Universal McCann, Initiative and TN Media), totaling some $8.6 billion.
Publicis's national spot-TV billings will grow significantly. The company has had spot billings of more than $2.3 billion through Zenith and Optimedia. Starcom and MediaVest will add about $1.5 billion.
Most billings are for network TV, but a small percentage of the dollars are spent in cable and national syndication.
Optimedia is currently overseen by Gene DeWitt, who earlier announced his resignation to take over the helm of the Syndicated Network Television Association, the New York-based trade association for sellers of national syndication ad time.
It was unclear last week whether the announced merger would affect DeWitt's timetable for moving to SNTA. He previously said he hoped to complete the transition by mid April but couldn't be reached for comment last week.
A spokeswoman for Publicis said last week that current plans are not to change operating structures of the media-buying firms. "They will continue to run autonomously at this point."
The structure is different at Interpublic. Last year, the company created a company called Magna Global, which negotiates all the purchases of national TV time on behalf of the company's buying units. At least for now, Publicis is not planning to create a similar company, the spokeswoman said.
A third big agency, Dentsu, based in Tokyo, will get a 15% stake in the new Publicis as a result of its current 21% stake in Bcom3.
The merger is likely to result in staff reductions. Combined, the two agencies employ 56,000 people worldwide. Bcom3 says it does work for half the world's top 100 brands, including Sony, Audi, Cadillac, Crest and Nintendo. Publicis clients include L'Oreal, Nestlé, Hewlett-Packard and Coca-Cola.
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