New SMG unit to combine buying power

13 May 2009

NEW YORK: In a bid to squeeze more value from its estimated $22 billion (€16.1bn; £14.5bn) of media buys, Starcom MediaVest Group is creating a new advertising buying unit that will consolidate the resources of a number of its offices.

The new SMG Exchange (SMGX) will pool the negotiating powers currently dispersed among Starcom and Spark in Chicago and MediaVest in New York.

Local media will be first under the wing of the new operation, together with below-the-line activities such as promotions, events and licensing. National broadcast advertising will be added next year.

The Publicis Groupe network also hopes to augment high-volume buying with more detailed market data and insight.

"The question was how do we ensure we are leaders of the next marketplace. It's an attempt to leapfrog to where we think things are going," explained Laura Desmond, worldwide CEO at SMG.

For clients, participation is voluntary. They can choose to keep their buying within an individual shop although one of the key tasks for John Muszynski, the newly appointed head of the unit, will be to maximise take-up.

SMGX draws on developments already in place in Publicis' overseas agencies, such as the China Media Exchange which pairs ZenithOptimedia with SMG's regional buying. However, client conflict would preclude Zenith's involvement in the US initiative.

Data sourced from Adweek; additional reporting by WARC staff