1 North American Media Consolidation Update Sony Research & Planning Council September 2002.

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Presentation transcript:

1 North American Media Consolidation Update Sony Research & Planning Council September 2002

2 Agenda Goals of North American Media Consolidation Project Background Agency Selection Process Why Universal McCann? AOR Summary Sony Participation in AOR Sony Media Council

3 Goals of North American Media Consolidation Leverage $600+ million media planning/buying in common vehicles to maximize messaging for the Sony brand Secure cost savings Improve financial results Fund brand enhancement activities

4 Project Background Global consolidation study started Q Participants included SCA, Sony Corporation and Sony Europe Key conclusions Consolidation is occurring in both agencies and clients Client consolidation results include cost savings, increased efficiencies and greater impact Primary benefits at Sony are across divisions, within geographic territories Buying and planning are integrally related

5 Agency Selection Process June 2001Sept 2001 Nov 2001Jan 2002 McCann Omnicom Starcom Mindshare Zenith McCann Omnicom Starcom McCann Omnicom

6 Why Universal McCann? Demonstrated expertise in critical areas Buying: #1 Planning: Innovative strategic thinking backed by proprietary tools and research Performance: Proven track record with SPE Flexibility: Staffing structured to meet Sony needs Pricing: Attractive commission rates

7 AOR Summary SCA units included in AOR: SPE, SME, SEL US and Canada 3-year term, effective April 1, 2002 Non-exclusive agreement Agreed UM staffing levels for each Sony company UM division”champions” and planning teams for each group UM AOR management and cross-divisional expertise for each Sony group plus SCA

8 AOR Summary FYE 3/03 Sony spending across divisions is anticipated to exceed $678 million Projected savings in year 1 = $21+ million Research obligations in contract (I will further define this point)

9 Sony Participation in AOR Sony Division US Canada SPEAll media; Internet in development; newspaper 1 year (renewable) All media except newspapers SELAll mediaAll media except Internet; will also use barter agency SMEBroadcast TV; explore expansion to other media SCAAll media for SCA and group campaigns N/A

10 Sony Media Council SCA established Sony Media Council Participants include representatives from each Sony division plus SCA; SCEA included as “observer” Designed to leverage UM relationship and realize media/marketing synergies Council tasked with developing Sony brand enhancement initiatives/activities Formulation of Sony Research & Planning Council Participants include Research representatives from each Sony division and SCA, plus UM Designed to maximize Sony research, plus UM commitments