Agency Stocks Fall With Market

Agency holding companies were not exempt from the drubbing most industry sectors experienced in the volatile stock market last week.

On Sept. 17, the first day back after the market’s record closure, major agency networks lost a greater percentage than the 7.1 percent decline sustained by the Dow Jones. At Fri day’s close, the Dow was down 14 percent from Sept. 10, the day be fore the terrorist attacks.

Of the big three networks, WPP took the biggest hit. Its stock closed Friday at $37, down 22 percent from Sept. 10. IPG, at $21.08, was down 16 percent, while Omnicom fell to $60.12, down 18 percent. Cordiant’s value tanked 41 percent with a price of $6.75 on Friday. Publicis was down 20 percent, at $16.90. Havas, on Nasdaq, closed at $6.05, down 21 percent.

Put in personal terms, top stockholders in the holding companies lost millions. Based on figures included in statements filed last spring, stock and options owned by Phil Geier, chairman emeritus of IPG, sunk from $39.9 million on Sept. 10 to $33.4 million last Friday. Omnicom’s John Wren lost $22 million in stock and op tions that had been worth $122.6 million. And Michael Dolan of Young & Rubicam saw his $188.1 million in WPP stock and options drop by $42 million.

With President Bush’s ultimatum to Afghan istan, many last week predicted greater declines for the economy and these marketing-services companies. But not Lauren Rich Fine of Merrill Lynch. “Holding companies are so diversified in geography and clients that they will find opportunities for growth and will improve,” she said.

David Leibowitz of Burnham Securities agreed that this week’s stock dive won’t last, but he doesn’t think im provement will come across the board. Categories, particularly entertainment and electronic gaming, may get worse, he said.

Stable industries included tobacco, defense and wireless. K



BOSTON—Mullen this week introduces a campaign for General Motors that touts the ease of purchasing a GM-certified used vehicle.

Introducing the tag, “The right way. The right car,” the campaign uses print and radio ads to convey the perks of buying a used car through the program—including a three-day trial period, limited bumper-to-bumper warranty, roadside assistance, a 100-plus point inspection and a 4.9 percent APR financing plan.

Print ads feature headlines fashioned as automotive nameplate typefaces on the vehicles’ trunk lids and tailgates. One reads, “The 3-day/150-mile guarantee. Just to make sure it gets along with your other car.” A second says, “24-hour roadside assistance. Another great service you’ll probably never need.”

The ads are a continuation of print introduced in June featuring the same tag. Research conducted by Mullen indicated consumers were wary of purchasing used vehicles. “People were afraid of inheriting someone else’s problem,” said Brad Audet, account man ager on the campaign.

The ads are running in USA Today and daily newspapers in 10 markets, including Boston.

Sixty-second radio spots running in target markets use a “right way vs. wrong way” approach. One, set in an operating room, compares two hearts ready for transplant—one from a human vegetarian nonsmoker and another of uncertain origins. Another depicts divers about to dive into two different shark cages—one made of top-of-the-line graphite with double-reinforced bars and another that will be fine “just as long as you get someone to hold the door shut.”

A voiceover says, “There’s the right way, and there’s the wrong way.”

GM Mediaworks and GM Planworks share media duties.

The Wenham, Mass., agency picked up the GM-certified used-vehicle business in 1996. Spending in 1997 was in excess of $10 million, but has dropped into the $1-2 million range in recent years, per CMR.