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AGENCY NEWS: MAJOR MERGER; COLA STRATEGIES; MILLER
Published February 1, 1995
In a transaction that has reportedly been under discussion for 18 months, Chiat/Day -- one of the "hottest creative agencies" in the '80s -- has agreed to merge with Omnicom Group's TBWA Int'l, an agency known more for its print than TV advertising. Terms of the deal were not disclosed, but several industry execs estimated Omnicom is paying in the "tens of millions" for Chiat/Day, including the agency's debt, which is said to be "far less" than $50M. Bill Targos, co-founder and chair of TBWA, will be the new chair and CEO of the combined operations called TBWA Chiat/Day, while Jay Chiat will become a consultant to Omnicom, now the 3rd largest world-wide ad agency holding company. Some of Chiat's major clients: Nissan's Infiniti division, Eveready Battery, Coca-Cola's Fruitopia and Quaker State. TBWA's major clients: Absolut, Sara Lee's Wonderbra, Nissan Motor and Evian Water. One note: BBDO, an Omnicom subsidiary, handles Pepsi-Cola and Diet Pepsi, and Omnicom officials concede it is unlikely Pepsi "will stand for" another Omnicom agency handling a rival in Coca-Cola's Fruitopia (Kevin Goldman, WALL STREET JOURNAL, 2/1). SOFT DRINKS: Because it appears diet cola sales have "reached a plateau" of about 26% of the $49B U.S. soft drink market, Coca-Cola will sponsor, "for the first time," three separate ad campaigns by three agencies to promote three different diet cola brands around the world. The "troika of campaigns is indicative" of the broadening of Coca-Cola's ad messages and agency relationships during the '90s. By contrast, PepsiCo is taking an opposite tack -- combining campaigns for Diet Pepsi and Pepsi under the theme "Nothing else is a Pepsi." The Diet Coke campaign will run in the four countries where it is sold: U.S., Australia, Britain and Canada. A second campaign will concentrate on Coca-Cola Light, as Diet Coke is known in 93 countries; the third will help sell caffeine-free varieties of Diet Coke and Coca-Cola Light (Stuart Elliott, N.Y. TIMES, 2/1). The caffeine-free Diet Coke ads target consumers over 40 (USA TODAY, 2/1). MILLER ICES TWO AGENCIES: Miller Brewing shuffled its agency lineup again yesterday, "parting ways" with J. Walter Thompson Chicago and reassigning its Miller Lite Ice beer brand from Bates USA in New York to the Leap Partnership of Chicago. Miller moved several smaller brands handled by Thompson Chicago, including Reserve, Lowenbrau and Sharp's to Young & Rubicam Chicago (N.Y. TIMES, 2/1).