Publicis Groupe’s Chinese media buying point Vivaki Exchange has suffered another major setback with the loss of L’Oréal – one of the biggest accounts in China – to its arch-rival Mindshare China, part of the WPP Group.
Vivaki Exchange is still reeling from the fallout of a corruption scandal which recently claimed the scalps of its two leading executives, Warren Hui and Ye Pengtao.
The win will no doubt put a broader grin on the face of WPP chief Sir Martin Sorrell as he prepares to unveil the group’s best quarterly organic growth in 10 years. A precise estimate of the account’s size remains elusive, although AdAge China places it at $2.5bn. Whatever, L’Oréal is the second biggest spender in China after Procter & Gamble. Mindshare is already the largest media buying operator in China, with billings of about $5bn in a total market of $47bn. Ad spend is growing at about 16% annually, according to Carat.
Specifically, the L’Oréal account is handled by the Zenith Optimedia unit of Vivaki Exchange, which has confirmed the loss. Zenith has been having a tough time with the L’Oréal account around the world. It recently lost out to Universal McCann in a $70m US consolidation pitch; and also to Maxus, another WPP unit, in a pitch in India. But it continues to retain the £73m media buying and planning account run out of London.
China is increasingly seen as the crucible of global media buying operations by all the premier league marketing services companies. A sign of the times is Omnicom’s decision to hold – for the first time ever – its annual meeting of top holding company executives outside the USA: it convened in Beijing last week.