Microsoft drops McCann and picks Starcom for lion’s share of over $ 1 b advertising role

SEATTLE, (Reuters) - Microsoft Corp has awarded the lion’s share of its $1 billion-plus annual advertising budget to Publicis Groupe’s Starcom unit, in a blow to incumbent agency Universal McCann.

After a periodic review lasting several months, the world’s largest software company said on Friday that Starcom MediaVest Group will handle its global media strategy and planning business, and be in charge of buying ad space in North America.

Universal McCann, a unit of Interpublic Group of Companies (IPG.N), will manage media planning and buying in more than 35 countries outside of North America. Microsoft spends about 60 percent of its ad budget in North America and about 40 percent overseas.

Previously Universal McCann handled all Microsoft’s ad strategy, planning and buying, except in Brazil and China.

A spokesman for Universal McCann said the loss of Microsoft’s North America business would have “very little impact” on Interpublic’s financials and that it had anticipated a potential change.

“While Microsoft is a very important client, going into this year we were conservative in our planning and had hoped for the best but planned for this outcome,” he said. “As a result, the impact on our financials and profit will be minimised.”