• by Joe Mandese  @mp_joemandese, April 20, 2004

For all the talk of media buying consolidation, the major media buying networks still control only a fraction of U.S. and worldwide media spending. And while the major media shops do indeed appear to be capturing a larger share of market overseas, they actually lost a smidgen of U.S. market share to smaller media buyers during 2003, according to a MediaDailyNews analysis of media agency billings estimates released Monday by The RECMA Report and ad spending data from Universal McCann.

During 2003, the top media buying networks - the ones owned by the major agency holding companies - placed only about 28 cents on every dollar of media bought in the U.S. marketplace and actually dropped a share point from 2002 (see table below). Publicis' Starcom MediaVest Group was by far the biggest U.S. media buyer, controlling a 4.8 percent share of U.S. media buys, a gain of 0.3 percentage points from 2002. Combined with its Zenith Optimedia Group's 2.7 percent share, the Publicis networks controlled a 7.5 percent share of U.S. media. That's a far cry from the type of market constricting consolidation critics of media buying M&As have charged, and it also suggests that the media buying industry is far more diffused than many industry observers give it credit for.

The MDN analysis was derived by applying RECMA's U.S. and worldwide billings market share to Universal McCann's U.S. and worldwide media spending figures. In the wake of the U.S. Sarbanes Oxley Act, which has made publicly traded advertising agencies loath to release media billings estimates, RECMA has become the de facto source of media agency billings data.

After the Publicis units, WPP's MindShare (3.8 percent) and Mediaedge:cia (2.1 percent) had the greatest combined share of U.S. media buying, followed by Omnicom's OMD (3.3 percent) and PHD (1.7 percent), and Interpublic's Universal McCann (3.0 percent) and Initiative Media (2.0 percent) units. Starcom MediaVest had the greatest market share gain (+0.3 percentage points), while Initiative Media had the steepest decrease (-0.4 points).

Worldwide, media shops have a more dominant share of global ad spending, accounting for 34.4 percent of all media buys. And they actually managed to increase their share of worldwide media spending by nearly a percentage point.

2003 Media Buying Market Shares (Vs. 2002)

                     ---U.S. Billings---     -Worldwide Billings-        
                    '03 Share    Vs. '02     '03 Share    Vs. '02 
OMD
3.3%    -0.1 pt          4.1%    -0.1 pt 
MindShare                3.8%    +0.1 pt          4.1%    +0.3 pt 
Starcom MediaVest        4.8%    +0.3 pt          4.0%    +0.1 pt 
Carat
1.9%      NC             3.8%      NC 
Zenith Optimedia         2.7%    -0.1 pt          3.3%    -0.1 pt 
Universal McCann         3.0%      NC             3.2%    -0.1 pt 
Mediaedge:cia
2.1%      NC             3.1%    -0.1 pt 
MediaCom                 2.0%      NC             2.9%    -0.1 pt 
Initiative Media         2.0%    -0.4 pt          2.7%    -0.2 pt 
MPG
1.1%    -0.1 pt          1.8%    +0.1 pt 
PHD                      1.7%    -0.1 pt          1.0%      NC 
Vizeum                    NA       NA             0.4%    +0.4 pt 
Top 12*
28.4%    -0.1 pt         34.4%    +0.9 pt 
All Others              71.6%    +0.1 pt         65.6%    -0.9 pt 

RECMA Worldwide Media Agency Networks billings report. *There were 11 networks in RECMA's 2002 base, which did not include Vizeum. NA = not available. NC = No change.