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Figure 3-6 Top 25

agencies ranked by U.S. gross income, 2001

Figure 3-6 Top 25

agencies ranked by U.S. gross income, 2001

were formed so that agencies could provide clients with integrated marketing communications services worldwide. Some advertisers became disenchanted with the superagen-cies and moved to smaller agencies that were flexible and more responsive.11 However, during the mid-90s the agency business went through another wave of consolidation as a number of medium-size agencies were acquired and became part of large advertising organizations such as Omnicom Group, WPP Group, and the Interpublic Group of Cos. Many of the mid-size agencies were acquired by or forged alliances with larger agencies because their clients wanted an agency with international communications capabilities and their alignment with larger organizations gave them access to a network of agencies around the world. For example, TBWA and Chiat/Day merged and became part of the TBWA Worldwide agency, which is part of the Omnicom Group, the world's largest agency holding company. The acquisition of mid-size agencies by large advertising organizations has continued into the new millenium. In early 2000, Fallon McElligott, one of the largest and hottest independent U.S. ad agencies, was acquired by French advertising giant Publicis Groupe, as was London-based Saatchi & Saatchi. In 2002 Publicis acquired the Bcom3 Group, whose holdings include the Leo Burnett Co.; D'Arcy Masius Benton & Bowles; Manning Selvage & Lee; Bartle Bogel Hegarty; and the Starcom Media Vest Group. The deal also includes a partnership with Dentsu, Japan's largest advertising agency.12

Many of the advertising organizations and major agencies have been acquiring companies specializing in areas such as interactive communications, public relations, direct marketing, and sales promotion so that they can offer their clients an ever-broader range of integrated marketing communication services.13 Recently the activity of the advertising holding companies has moved in a new direction as they have begun pursuing alliances with talent agencies. A new agreement negotiated between the Screen Actors Guild and the Association of Talent Agents in 2002 allows outside investors such as advertising agencies to own stakes in talent agencies that seek and negotiate work on behalf of actors, directors, and writers as well as some athletes.14 By Exhibit 3-4 Mentus having a stake in the talent business, ad agencies can negotiate deals with current, as

Communications specializes well as up-and-coming, celebrities for their clients. in creating ads for high-tech

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