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News Corp. bows ad consolidation division

Move puts co. on forefront of media buying trend

News Corp. unveiled a new division Tuesday to exploit its five-continent reach by customizing media buys for any and all of its 35 ad-supported businesses.

The new division, called News Corp. One, will be based in New York and headed by Kayne Lanahan, who previously served as media director at the Soho ad agency Merkley, Newman, Harty. Also on Lanahan’s team is Kevin McAuliffe, formerly of NBC and Pepsi Entertainment Group, and Mark Stroman, formerly in charge of Fox Broadcasting’s on-air promotions.

The move puts News Corp. on the forefront of a trend by major advertisers toward one-stop media shopping, although the media and marketing communities remain mixed in their take on this particular form of consolidation.

Arnie Semsky, worldwide media director for Pepsi agency BBDO, noted that six media companies already control 90% of the ad dollars spent on television and many of the media dollars spent elsewhere. “With this announcement,” he said, “it looks as if New Corp.’s leading the pack to make vertical integration pay off. Everyone else is still taking baby steps.”

Alan Gottesman, the media and advertising consultant at New York-based West End Communications, countered that, in reality, the leading media companies “don’t control (anything) — they’re just the beneficial recipients of ad revenues.” Gottesman went on to say that Reader’s Digest — which, unlike News Corp.’s interests in everything from newspapers to pay TV, offers essentially the same product around the world — has yet to make a success of its customized, integrated buys.

“The proposition is one of convenience, but what invariably happens is you’ve got to take some lousy properties just to get the ones that are most in demand,” Gottesman said.

News Corp. One will report to Jon Nesvig, the president of sales of Fox Broadcasting Co., who in turn reports to Peter Chernin, News Corp.’s president and chief operating officer. “The challenge,” Chernin said, “is to open up new opportunities to provide customized advertising opportunities. News Corp. is uniquely positioned to deliver powerful and diverse media resources that are tailored to maximize market penetration across of a variety of advertising platforms.”

If so, division head Lanahan may be just the person to do it. Having begun her career at J. Walter Thompson in Chicago, where she planned media for such packaged-good clients as Kraft and Kellogg, she then joined the Coca-Cola Co., where as the director of North American media she oversaw Coke’s involvement in the 1994 and 1996 Olympics, as well as managed all media promotions and all entertainment and sports broadcast negotiations.