Credit Suisse Says Client Dollars Determine Agency Strength

by , Jul 18, 2006, 7:00 AM
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As media agencies labor to advance the notion that their buying capabilities are buttressed by proprietary research and strategic functions, Credit Suisse analyst Debra Schwartz argues that an agency's strength is primarily based on the amount of client dollars it controls.

Reacting to the 2006 global billings report from RECMA, the consulting firm that monitors the media-agency business, Schwartz wrote in a report Monday that "the media-buying business has become largely commoditized and is now a scale business."

"The level of clients' advertising funds under management is directly related to a media buyer's relative negotiating power in securing discounts," she wrote.

RECMA's 2006 projected rankings, according to Credit Suisse, show that media buying under WPP accounts for 17.5 percent of the global market, followed by Publicis at 12.9 percent, Omnicom at 9 percent, and IPG at 7.4 percent.

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