• by Joe Mandese  @mp_joemandese, September 2, 2005

In what appears to be the first official merger of assets between Publicis Groupe's media networks, Starcom MediaVest Group announced it is absorbing Yellow Pages media unit Saatchi & Saatchi Telephone Directory Advertising into its SMG Directory marketing division.

While the Rochester, NY-based Saatchi unit will not relocate to SMGDM's offices, it will officially become a part of SMG and will report to Kathleen DeCaire-Aden, CEO and managing director of SMGDM.

Although the merger has been planned since the fall of 2004, the official restructuring signifies what many expect to be a more pervasive integration of Publicis media assets, which are principally SMG and ZenithOptimedia Group.

That integration has happened more slowly than some outsiders had expected, but recent moves suggest that big changes are afoot. For one thing, Publicis has created a corporate-level media oversight unit. Dubbed Publicis Groupe Media, the unit has a board that includes SMG CEO Jack Klues. In recent months, it's become clear that Publicis has centralized certain aspects of media under the corporate unit. For example, Rishad Tobaccowala, chief innovation officer of Publicis Groupe Media, disclosed publicly at MediaPost's OMMA West conference in June that the group now oversees alls digital media investments for both SMG and ZenithOptimedia.

Publicis has been loath to provide many details about the corporate media group, which insiders say is still evolving. Like the corporate media entities at Omnicom and WPP, Publicis is concerned about the prospect for client conflicts, and wants to ensure that its individual media networks are seen as autonomous units with strategic firewalls and independent management teams. On the other hand, all major agency groups are looking to develop greater operating efficiencies in their media services, and are struggling to find ways to eliminate redundancies to improve both profit margins and client service.

That seems to be exactly what was behind Publicis' decision to merge its Yellow Pages media assets under SMG. Noting that the merger creates one of the ten largest directory marketing agencies, SMGDM's DeCaire-Aden said it "ultimately strengthens our collective capabilities and service offerings for our clients."