Microsoft’s oddly-timed ad review is worrying for IPG’s UM media agency as WPP’s GroupM looms

MSFT_logo_0-243x300The timing of Microsoft’s global ad review looks curiouser by the day (the Windows and Xbox giant is in the process of appointing a new CEO to replace Steve Ballmer) which makes the task of pitching even more challenging for the marcoms groups who’ve been approached – Interpublic, Publicis Groupe and WPP.

PG also has issues to sort of course; its merger with Omnicom (not a Microsoft agency group) is still grinding through the regulators. Omnicom client Apple is not likely to take kindly to Microsoft lodging at a combined Omnicom/Publicisi Groupe.

All of which, as we said, makes WPP a pretty warm favourite. Y&R and Wunderman currently have their feet under the table at Microsoft.

So there’ll be anxiety at PG, which, inter alia, handles Microsoft’s near $600m media spend in Noprth America through Starcom MediaVest. And at Interpublic’s UM (the one-time Universal Media) which handles about the same amount of money elsewhere in the world.

In some markets, notably the UK, UM is Microsoft and not that much else. IPG has been trying to play catch-up in media in recent years; it’s old model of concentrating on handling the media part of the accounts at its creative agencies, most notably McCann, DraftFCB and Lowe, has foundered as those agencies have lost as many clients than they’ve gained. And media these days is populated by some aggressive operators, most notably WPP’s GroupM (the ace in WPP’s pack), who barely acknowledge the existence of creative agencies.

UM is still, probably, the biggest of IPG’s three media agencies; the others are Initiative (linked mainly to Lowe) and BPN, which was set up a year or so ago as a ‘conflict’ shop (which is looking a bit optimistic as there isn’t that much that constitutes a conflict). All three operate under IPG’s Mediabrands.

Mediabrands is still a major force in the US but the loss of Microsoft media outside the US would be a big blow; not least to IPG shareholders who have bid up the price over the past year or so in the hope/expectation of a bid from WPP. WPP’s Sir Martin Sorrell (the old meanie) is refusing to play that game – for now anyway – maybe in the expectation that the price will fall.

Microsoft has hinted that it aims to complete the review in the second quarter of this year, by which time a new CEO might be appointed – although, probably, consigned to his or her garden unless the lucky candidate is an insider or Stephen Elop, the former Microsoft executive who engineered the sale of Nokia’s consumer business to Microsoft.

So surely the review should have been postponed, at least until a new CEO is announced. Whoever wins the various Microsoft accounts will be on notice from the word go. IPG’s agencies, particularly UM, will be feeling especially nervous.

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About Stephen Foster

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Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.