Starcom Media Vest has lost the Telefonica Latin America media planning and buying business as Telefonica has entered into a wider global agreement with the Havas Group which has resulted in the US $260 million European media account – and the US$ 65 million O2 business – moving from Publicis Groupe’s ZenithOptimedia to Havas Media. Telefonica’s Latin American business will also be managed by Havas Media.
Spanish-Telco giant Telefonica is withdrawing its US$ 250 million/year Latin American media buying business from Starcom Media Vest, who has managed the account for more than 5 years. Although in July, Telefonica announced it was retaining Starcom as its media buying agency for Latin America as well as also Publicis owned Zenith Optimedia for its European and O2 business for an additional 5 years, a spokesman for Telefónica confirmed that the initial selection of ZenithOptimedia in July had been usurped by a “global strategic appointment of Havas Group” that will include media planning and buying. “I can confirm that we have lost the business but I have nothing to add beyond that,” Ashok Sinha, VP, Global Brand Marketing & Communication, at Starcom Media Vest Group in New York told Portada. Sources at Havas Media in Miami did not want to comment their new Telefonica account.
The initial selection of ZenithOptimedia and Starcom Media Vest in July has been usurped by a “global strategic appointment of Havas Group” that will include media planning and buying.
Moving forward, it is understood that Telefonica is now looking for alternative ways to work with Publicis, a Telefonica spokesman said, although he acknowledged that media will not be part of the future cooperation. he also added that Telefonica soon will open a global pitch for creative services.
No Pitch or Procurement
The process was not pitched or procurement led but was part of an overarching business decision made by Telefonica chairman César Alierta following its purchase of Vivendi’s GVT in Brazil in September this year. The decision coincides with suggestions that a deal had been struck between the Havas shareholder Vincent Bolloré and Telefónica’s chairman, César Alierta.
The spokesman would not comment on whether Bolloré had a role to play, but said that the decision to appoint Havas globally “had always been an ongoing consideration”. Paul Bainsfair, the IPA’s director-general (the Institute of Practioners in Advertising in the United Kingdom), said: “The IPA New Business and Marketing Group would like to express concern over the reported outcome of this processThe impact of poor pitch practice on agencies can be far more crippling than many clients appreciate.” In the UK, Telefónica’s O2 is one of ZenithOptimedia’s longest-standing clients, with roots stretching back to 1991. Telefónica Europe operates under the O2 brand in the UK, Germany, the Czech Republic and Slovakia.