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Havas and Grey hit back at Sorrell's comments on size

LONDON - Havas and Grey Global have hit back at comments made by Sir Martin Sorrell, with Grey chief Ed Meyer calling his comments, about size being all when it comes to ad holding companies, 'totally silly'.

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Speaking at a conference in New York earlier this month, Sir Martin derided the prospects of the mid-sized advertising groups.

He argued that scale was everything and knocked back the prospects of French firm Havas, which owns the advertising agency Euro RSCG Worldwide, and Grey Global, which owns Grey Worldwide and MediaCom.

"The middle ground is a very uncomfortable place to be," Sir Martin said at the Goldman Sachs conference in New York.

He argued that seventh-placed Grey, known for its slow and steady approach as well its reliance on Procter & Gamble, was damaging itself by literally giving its services away, while he was even more damning about sixth-placed Havas.

He said that the situation for Havas was remarkably similar to that of Cordiant, the other former minnow on the global advertising stage, which collapsed and was snapped up by WPP after a bitter fight.

Havas, which has recently reorganised, is seen as the weakest of the advertising groups operating on the global stage. Like Grey, it has only one international advertising network and its media planning and buying network, Media Planning Group, is weak in comparison to rivals.

MPG faces a wipe-out in the UK, following the recent loss of the £58m Orange media-planning and buying business to Initiative.

WPP fought a bitter and successful battle two years ago with Havas for CIA owner Tempus.

Hitting back at the derogatory comments, Grey chairman and CEO Ed Meyer told Reuters that he had no quarrels with the majors, but made it clear what he thought of Sir Martin's comments.

"The view of some of my counterparts that the size of the holding company is the only thing that matters is totally silly. I have no quarrels with the megas. Some will do well and some will explode because they're a management nightmare," Meyer said.

There is little doubt where his comments about meltdown and management nightmare were directed. His US rival Interpublic Group has been in a mess for months on end with spiralling debts, accounting scandals and comings and goings at the top.

Hitting back for Havas, chief operating officer Bob Schmetterer told the news service that size was not everything.

"Sir Martin enjoys saying things in public that are controversial. He is who he is. But if you listen to the clients of the world -- General Motors, Ford, Procter & Gamble -- every one of them is saying it is not about advertising but communication. Size is irrelevant to that," he said.

Schmetterer also denied that Havas was vulnerable, because it was not reliant on any single client.

"Cordiant and Bates lost major, major clients -- when you do that and you don't have the scale and variety of clients we do, you're in a much more vulnerable position," he told Reuters.

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