Aegis Group has won the $3bn-a-year advertising account for General Motors, the third largest global advertiser, in what analysts have referred to as a "game changing" win for the UK media buying business.
Maurice Levy's Publicis Groupe, which controlled GM's multibillion-dollar account in North America, is the biggest loser of the shift.
Aegis, which owns agencies including Carat and Vizeum, has landed a multi-year contract to handle GM's media planning and buying across 140 countries for ad campaigns as well as services including mobile communications and social media strategy, excluding India, China and Brazil.
Ian Whittaker at analysts Liberum said Aegis's win was a "potential game changer" which could easily boost the company's organic growth by 3% or more – perhaps £50m in annualised revenues to the bottom line.
Aegis Group already handled the European business for General Motors, estimated at about $500m, meaning it has won an estimated $2.5bn in new business snapping up the account across the rest of the world.
Publicis Groupe has taken the biggest hit from GM's move to consolidate its business into one media buying group, controlling more than $2bn of business in North America and Asia-Pacific, although India and China were excluded from the pitch. IPG held the business in Latin America, although the Brazilian market was excluded.
"This should lead to consensus upgrades of at least 4% at the earnings per share level, and possibly more," Whittaker said. "The fact that Aegis has won such a major global account should also provide a boost for its reputation and ability to pitch for other big global accounts and further highlights the turnaround in its North American operations."
The contract starts in April so should see Aegis benefit by about £35m in 2012.
"This is a defining moment for our business and the market," said Nigel Morris, chief executive of Aegis Media Americas.
WPP's Kantar Media puts GM's global spend at $3bn.
However, US industry publication AdAge cites GM's 10-K filing to the US Securities and Exchange Commission which reckons that worldwide advertising costs were $4.26bn in 2010, and $5.1bn including sales promotions. A total of 67% of this spend was in the North American market.
In a statement Public Groupe played down the loss to its Starcom media buying operation, saying it would represent "less than 0.5%" of total group revenues.
Analysts put Publicis Groupe's 2011 revenues at about €5.7bn, making the supposed loss about €30m in 2012, although the group will only feel the loss of six months' income as it will hold the business until June.
"We're proud of the insight and high level of professionalism that Starcom has brought to its work on GM's image over the years, and of the support that we've given to GM through many ups and downs," said a spokeswoman for Publicis Groupe, referring to GM filing for bankruptcy in 2009. "Although we regret this development, Starcom is working on a great deal of new business and will continue to grow. Publicis Groupe will serve GM on other fronts".
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