Press Release

NEW YORK, July 12 /PRNewswire/ -- Establishing a new model in the media services world, The Interpublic Group of Companies (NYSE: IPG) has created a separate advertising media negotiating company that will negotiate -- on an aggregated basis -- on behalf of its media planning and buying operations, it was announced today by John Dooner, Chairman and CEO of Interpublic.

The new organization, called Magna Global, Inc., will begin operations on September 1 in a number of the world's largest media markets, including the U.S., the U.K. and Germany (where the negotiating-only model already operates successfully). It will then roll out to become fully worldwide. According to published industry rankings, Magna Global will be both the largest U.S. and worldwide media negotiating entity on behalf of advertisers. Aggregated Interpublic worldwide media billings, including those of the recently acquired True North companies, have been reported as being about $40 billion.

Magna Global will represent the aggregated media negotiating interests (not the media buying or media planning practices) of all of Interpublic's media entities. By focusing exclusively on media negotiation, Magna Global will be able to provide all of the Interpublic agencies and their own respective clients with the benefit of combined leverage while fully protecting the confidentiality of proprietary client information and goals. The negotiating leverage of Interpublic's two major global media services brands, Initiative Media Worldwide and Universal McCann Worldwide, will be combined in the new "agency-neutral" organization, as will ultimately those of all of Interpublic's ad agencies that plan and buy media on their own.

"Magna leverages Interpublic's substantial buying clout for all our clients without infringing on individual client or agency proprietary buying and planning competencies," said Mr. Dooner.

To ensure complete neutrality and confidentiality, Magna Global will report administratively through Interpublic's Advanced Marketing Services, headed by Larry Weber, Chairman and CEO. Magna Global's operating focus will be on each individual country. Each country operation will also be headed up by an independent full-time executive and managed by a representative board.

Mr. Dooner continued: "Interpublic is continuously looking for ways to leverage the size and scope of our operations in order to help our agencies improve their competitive positions in all areas of their business, of which media is one. Magna Global's reason for being is to drive negotiations of media time and space to a new level of scale, breadth and sophistication on behalf of all of the clients of all of Interpublic's ad agencies. To achieve this, it will aggregate Interpublic's global media assets to negotiate maximum value."

Magna Global's charter will also evolve to include non-proprietary services in the areas of programming, research and marketplace modeling. In some markets, this will also include the centralization of common back room financial, administrative and data systems.

Magna Global USA, the new media negotiating entity that will begin operations in the U.S. on Sept. 1, will focus first on national TV media only; this includes the six major TV networks (ABC, CBS, Fox, NBC, UPN, WB) as well as the national syndicated markets and the national cable TV networks. Magna Global USA's mandate will then evolve to include all media as well as programming. Total measured media spending in the U.S. in 2000 came to $98.7 billion, of which about a third, or $33.7 billion, was spent in national TV, according to published industry data. Interpublic agencies in total spent about $8.6 billion on national TV in 2000, or roughly one in every four dollars, according to published information.

Bill Cella, who has been Executive VP-Director of National Broadcast & Programming at Universal McCann, will leave this position to become Chairman of Magna Global USA. His team will include professionals covering media negotiations, financial analysis, non-proprietary research, data systems and modeling, and TV programming.

Mr. Cella noted the timeliness of Magna's launch, given the "dramatic changes in the media landscape both as a result of consolidated media ownership and fragmented media distribution." As an example of how media-ownership consolidation is reshaping the media landscape globally, he observed that three media companies now account for more than 50 percent of the U.S. National TV market in terms of audience ratings.

Similarly, in Germany two companies control more than 90 percent of the TV market; a comparable situation exists in Italy. Media-ownership consolidation, however, is only one among many factors contributing to the creation of Magna Global. Magna will negotiate with all media where it can obtain additional negotiating value, including engaging in cross-media platform negotiations.

In the U.K., Mick Perry will leave his current post as Vice Chairman of Universal McCann to become Chairman of Magna Global UK. Magna Global UK will concentrate initially on TV negotiations and ultimately include all media.

The concept behind Magna has been successfully working in Germany, one of the world's largest media markets, for the last two years. Universal McCann and Initiative Media have cooperated (while remaining separate and competitive) through the organization known as Intensive in Germany to provide consolidated leadership in media negotiation. Dominico Madile, CEO of Intensive, will continue to head the Hamburg-based unit when it is renamed Magna Global Germany, effective in September.

The Interpublic Group of Companies, Inc., is the world's largest organization of marketing communications and marketing services companies. Its major global companies include McCann Erickson WorldGroup, The Partnership, The FCB Group and Advanced Marketing Services. The shares of Interpublic trade on the New York Stock Exchange (symbol: IPG).

SOURCE The Interpublic Group of Companies, Inc.

CONTACT: Rebecca Oddsund, 617-520-7009, for Advanced Marketing Services; Stewart Alter, 212-984-3936, for Magna Global/