GroupM merges media agencies Maxus and MEC to cut costs

GroupM, the media investment group, has merged its media agency arms MEC and Maxus in a move to save costs and combine similar portfolios. Though not yet given a new name, the merged business will share capabilities and be led by Tim Castree, MEC’s current CEO.

The money that GroupM will save thanks to the merger, the company plans to use to expand digital agency Essence, which it acquired back in 2015 to focus on a more data-powered media approach. In a press release, the company noted that it wanted to add traditional media capabilities to Essence and expand the agency’s footprint.

Brian Lesser, CEO, GroupM, explained:

“Combining [MEC and Maxus] gives us scale but also flexibility to invest in [centralized tech and data unit] mPlatform and more efficient processes.”

The company has made a number of structural adjustments since 2016. It also hopes to expand its mPlatform data hub, which integrates data analytics and digital services including search, social, mobile, digital ad operations and programmatic to reach a greater number of markets (currently 47).

With advertisers more conscious of their budgets and trying to cut costs, agencies are restructuring. GroupM will consist of three media brands, including MediaCom, Mindshare and the new company.

Lesser adds that the company had indicated the move already last week.

“We’ve signaled pretty aggressively that we want to simplify our organizational structures, make things more streamlined, get as many of our experts in planning, buying and digital as close to clients as possible and make it easy for clients to access our products and services.”

He notes that there is a clear trend toward consolidation and clients are pushing for a more simplified and streamlined approach.