• by Joe Mandese  @mp_joemandese, November 29, 2004

Carat, the purest play of the major independent media services agencies, also appears to be the most diversified. Carat's U.S. operations derive nearly a third (29 percent) of their billings from so-called diversified services such as multicultural, direct marketing, Yellow Pages and interactive media, according to a new report from Paris-based media agency tracking firm RECMA.

RECMA's calculations for diversified services also include things like sports marketing, sponsorships, event marketing, product placement, barter, outdoor media, video games, and dedicated marketing and media research operations.

The diversification of Carat's media services portfolio is noteworthy for two reasons: 1) Other media agency networks have made more noise about the range of their media services offerings; 2) Diversification is becoming increasingly important for clients seeking a "media neutral" communications channel approach to media.

It's also important for another key reason, according to RECMA's analysts, who say it is critical to the future growth of media agency billings. "Growth for the media agencies mainly depends on the economic situation and the variation of the {gross domestic product], but also on the development of new services more and more requested by major advertisers concerned about increasing their spending in non-traditional media," they said.

After Carat, Interpublic's Initiative Media unit is the most diversified media shop, deriving 24 percent of its gross media billings from non-traditional media planning and buying services. WPP's Mediaedge:cia ranked third, with 21 percent of its billings from diversified services, followed by Grey Global's MediaCom unit (20 percent).

OMD ranked fifth (19 percent), but Publicis' Starcom MediaVest Group, which has been touting its diversified services portfolio, tied for sixth with WPP's MindShare unit, which each generate 15 percent of their billings from such services.

Universal McCann (4 percent), PHD (5 percent) and ZenithOptimedia (6 percent), are the least diversified, according to the report.

Percentage of U.S. Billings From 'Diversified Services'

Carat                29%  
Initiative           24% 
Mediaedge:cia        21% 
MediaCom             20% 
OMD                  19% 
Starcom MediaVest
15% 
MindShare            15% 
MPG                  12% 
ZenithOptimedia       6% 
PHD                   5% 
Universal McCann      4% 

Source: RECMA "Diversified Services in the U.S." report. November 2004.