In a move aimed at enhanced synergy, economies of scale and enhanced media clout, the House of Tatas will channel its media operations through a single agency, making it the largest media buyer in the country after Hindustan Lever.

The Tatas have appointed Rediffusion DY&R's media buying arm -- The Media Edge -- as its Agency of Record following a fierce pitch that involved at least four other agencies. The group will adopt the centralised media buying approach effective January 1, 2002.

So far, only 14 group companies, with a collective ad spend of Rs 150 crore, have signed up for the 'Group Synergy Project', as it is being dubbed. "Other companies are in the process of putting their people and systems together, following which they will join this project," said a senior Tata official.

Companies that have signed up include Titan, Tata Tea, Indian Hotels, Voltas, Trent, Tata AIG, Tata Internet, Tata Finance and Tata Chemicals. Others like Tata Engineering and Tata Steel are expected to sign within 2-3 months.

"Once other group companies sign up, our collective media buying should increase to about Rs 250 crore," said the official. Under the new system, the group's expected savings would be in the region of Rs 22 crore.

"We expect that the savings from a collective media buying approach would be at least 15 per cent, even after our ad spends increase," said the official. The Tatas have also brought in Pradeep Iyengar from Fulcrum -- Hindustan Thompson Associates' media specialist arm -- to coordinate the group's media buying.

Under the new system, the agency of record would get a commission of 2.5 per cent on media spends, while 12.5 per cent would go to the creative agency.

Hindustan Lever was the first company in India to pool its media buying and planning functions under one roof when, in January this year, it appointed MindShare to manage its Rs 600 crore-plus consolidated advertising account. MindShare bagged the account after pitching against Lowe Lintas' Initiative Media.

MindShare carries out combined media planning, implementation, buying and research for advertisers with WPP's big-daddy agencies -- market leader Hindustan Thompson Associates, Ogilvy & Mather and also Contract Advertising.

MindShare handles media buying and planning for all Lever group brands for the India and Central Asia markets like Bangladesh, Sri Lanka and Pakistan; though India accounts for almost 75 per cent of spends.

HLL is the largest advertiser in the country, but its annual ad spends are reported to have fallen to the Rs 400-crore level in the last few months.