Aegis-owned Carat has reportedly pinched the UK government’s media buying business from M4C, a WPP construct employing over 100 people, assembled from its gaggle of media agencies including Mindshare and MediaCom.
The UK government’s media account isn’t what it was in the days when its ad body the Central Office of Information grew like Topsy under a series of Labour administrations – down from over £400m to less than £200m – but it’s substantial and, presumably, profitable. The latter depends on the negotiations with the newly-established Government Procurement Office but Aegis/Carat are old hands at this and will have found a margin somewhere.
The win is just the latest in a series of big reviews that have gone to Carat. Three years ago its holding company (now Dentsu/Aegis) won General Motors’ whopping $3bn global media buying business and, more recently, Microsoft’s $1bn plus global account.
So what’s its secret?
Also this week Carat was voted, narrowly, the media agency most clients would shortlist according to something called The International Media Image Survey Agency Report. Carat UK CSO Dan Hagen said this was because: “our focus on convergent consumer behaviour leading to business outcomes is really motivating to both clients and our own people.
“This has created a strong internal culture that celebrates innovative solutions. This creates a great vibe around our work, and clients feel that.”
Not quite sure what the Whitehall bean counters made of “convergent consumer behaviour.” Price would have been top of their list and Carat seems to be able to beat most of its rivals on that score. Maybe this is because its ultimate owner, Japanese giant Dentsu, is as interested in market share as profit while rival WPP is insistent on achieving its margins – it’s aiming for 15 per cent – quarter by quarter.
But Carat can do the clever stuff too although it retains its (valuable) reputation as the hardest of hard negotiators. Whatever its exact formula, it’s become the go-to media agency for really big media accounts. That’s something that will currently be exercising the bosses of WPP’s GroupM media holding company, having missed out on both Microsoft and UK Gov.
That and what to do with al those people at M4C.