WPP Confirms Wins AT&T Advertising Contract Worth $2-$3.4 Billion Annually

LONDON -(Dow Jones)- WPP Group's Mediaedge:cia unit has won all media planning and duties for AT&T after the U.S. telecoms operator consolidated its media buying work, a spokeswoman for Mediaedge:cia said Friday.

The work has been reported to be valued at between $2 billion and $3.4 billion in gross billings on an annual basis. The spokeswoman declined to confirm the exact value of the account but pointed towards these reports.

Mediaedge:cia has won all AT&T's media planning and buying work, which was previously split three ways with WPP sharing planning and buying duties for AT&T's wireless unit with France's Publicis Groupe, and Omnicom looking after media planning and buying for its fixed line business.

AT&T began a review of its media work in August which it said at the time was designed to incorporate the wider group after the 2006 Bell South takeover and to "maximize efficiencies under a single agency model."

WPP has worked for several years on AT&T Wireless, previously known as Cingular, in the U.S., with work including launching text message-based promotional campaigns with Fox's American Idol reality show and the recent launch of Apple's iPhone, for which AT&T is the exclusive handset maker.

UBS said in a research note Friday the win could add between $40 million and $60 million, or between 0.3% and 0.5% to organic revenue growth in 2008.

Citigroup estimated the work could add 0.6% to 2008 organic revenue growth.

UBS noted the news was "slightly negative" for Publicis, which has historically been strong in the U.S. but has seen its U.S. performance weaken in recent months.

Stocks in major advertising holding groups including WPP, Omnicom and Publicis have been under pressure recently amid concerns a weakening U.S. economy could hit advertising expenditure. WPP's shares tumbled by over 4% last week after the company said third quarter organic revenue growth fell slightly short of expectations.

At 0918 GMT shares in WPP were trading down 8 pence, or 1.1%, at 649 pence amid a lower overall London market.

-By Jessica Hodgson, Dow Jones Newswires; +44 207 842 92 93; jessica.hodgson@dowjones.com

(END) Dow Jones Newswires

Posted to the site on 26th October 2007