Volkswagen Eyes $1.4 Bil. Consolidation With MediaCom

NEW YORK Volkswagen, which has been reviewing its $1.4 billion global media account, is leaning toward consolidating the business at Grey Global Group’s MediaCom, sources said.

The business has been divided between MediaCom, which handles VW in key European and Asia-Pacific markets, and Havas’ Media Planning Group, which works for VW mainly in North America.

VW’s evaluation of its global media needs also includes its Audi brand.

With sales sagging, most notably in the U.S. and Canada, VW has been seeking ways to streamline its media buying process and achieving cost savings. That effort includes a recently completed evaluation of global media buying in which MediaCom and MPG were the only participants, Volkswagen has said [Adweek Online, Sept. 30].

Sources said VW marketing and procurement executives have agreed to consolidate with MediaCom, but that decision has not yet been finalized by senior management at the German automaker’s headquarters in Wolfsburg, Germany.

MPG and MediaCom and their parent companies have not yet been informed of any decision, according to sources. Both MPG and MediaCom referred calls to the client, where a representative said no decision has been made.

Separately, Havas faces another global challenge on Intel, which has confirmed placing its $300 million account into play [Adweek Online, Oct. 5]. That business is handled by the holding company’s Euro RSCG and MPG units, which are expected to defend.

VW spends more than $340 million on ads in North America where its creative is with Havas’ Arnold in Boston. Havas’ McKinney + Silver in Raleigh, N.C., handles Audi’s creative in the U.S. and Canada. Omnicom Group’s DDB handles the brand in most overseas markets.

As Havas faces a new round of setbacks, making current management more vulnerable, speculation is mounting about the intent of French corporate raider Vincent Bollore, who now owns more than 16 percent of Havas’ shares, and is said to have the support of more than 25 percent of the company’s shareholders.

Bollore is said to want to replace Havas CEO Alain de Pouzilhac, but he may also profit from selling his stake to Havas rivals who are eyeing a takeover of the French holding company.

Havas last month came up short in its bid to acquire Grey Global, which has agreed to an acquisition by London-based WPP Group, owner of MediaCom.

—with David Gianatasio