Western International Media, a leading media buying firm, is in negotiations to buy up an unspecified stake in another Los Angeles-based neighbor, Zentropy Interactive, people close to the negotations said. The deal could be finalized as soon as this week.
Daniel Roth, chief strategic officer at Western, declined to comment on the talks. Roth and Western president and chief operating officer Michael Kassan are believed to be heading discussions for the agency. Zentropy officials also refused to comment.
The potential investment in Zentropy by Western, a unit of The Interpublic Group of Companies, New York, would give the media-buying stalwart a division to develop online media, in the form of both Web sites and ad units, as it continues in its strategy to work more directly with advertisers rather than through ad agencies. Western reported $2.6 billion in U.S. media billings for 1997.
For Zentropy, the Western affiliation would put the online agency in front of more advertisers at a time when they are ready to commit dollars to multimedia ad campaigns, perhaps convincing some to shift more money toward online media buys. Media planning is typically a higher margin business for online agencies.
Zentropy has amassed a roster heavy with West Coast-based clients, including skincare company Neutrogena and Dreyer's Grand Ice Cream, plus movie studios and record labels such as Twentieth Century Fox Pictures and Polygram Records. Zentropy has been working continuously with Western's syndication division since the May 1997 launch of the Conan.com Web site for the syndicated television series.
Zentropy specializes in content development for the Internet, interactive television and online marketing. In 1997, the agency generated $2.3 million in revenue.
The proposed deal would be a deviation from the recent spate of agency mergers in which traditional ad agencies have initiated deals with inadequately funded interactive agencies. This would be the first deal in which a company specializing in media buying purchased an online agency.
While it hasn't been as aggressive as its New York-based competitor Omnicom Group, IPG currently owns a stake in a variety of interactive agencies including: Thunder House Online and Nicholson NY.