"This is a media clout game, and there is no question clout is clout-the bigger you are the more you have," said Laurel Cutler, board member of Fallon McElligott Inc., the Minneapolis ad agency. "Clout, as always, will remain with the clients. But some very large clients will be a little nervous if all their business is at the mercy of one holding company," Cutler added. "I am not sure what the impact of that will be".

WPP and Y&R, which serve some of the world's best-known brands, have an estimated 50 per cent overlap in client revenues. They share their largest client, the Ford Motor Co.

Ad industry experts see few conflicts between WPP clients, which include American Express, Eastman Kodak and Kraft Foods, and those of Y&R, such as AT&T, Cadbury Schweppes and Sony.

"This is not really about advertising, but about distribution," Cutler told Reuters, referring to the market for commercial time on radio stations and television networks and ad space in newspapers, magazines and on the Internet. "It will have more impact on the media than on the advertising industry."

"It is simply breathtaking that three of the largest agencies will be in one holding company. But then, we have become used to it and we will see more of it," said Cutler, referring to WPP ad agencies J. Walter Thompson Co., Ogilvy & Mather Worldwide, and now possibly Y&R.

Industry sources in London said WPP has reached an agreement in principle to buy Y&R in a stock deal and hopes to announce final details this week. But the boards of both companies still had not formally approved a transaction, said a source familiar with the situation.

With estimated combined revenues of $6.69 billion, it will create the world's largest advertising group. According to Advertising Age magazine, in 1999, Y&R was the seventh-largest in revenues at $1.87 billion and fifth-largest in billings at $16.72 billion. WPP was third in revenues at $4.82 billion and third in billings at $37.1 billion.

Y&R, whose major businesses include the Young & Rubicam Advertising and Dentsu, Young & Rubicam ad agencies and the Burson-Marsteller public relations firm, is one of the few Madison Avenue agencies that still have offices on the Manhattan street that is synonymous with advertising.

Y&R, an American advertising icon for most of the 20th century, played a major role in developing the US industry, from early radio shows with comedian Jack Benny through such successful television ad campaigns as Dr Pepper's "Be a Pepper," the United Negro College Fund's "A Mind is a Terrible Thing to Waste" and MetLife's "Get Met, it Pays."

Paul Schulman of Schulman Media, a New York-based ad buyer, said the size of the new WPP would not necessarily give the agency more clout to dictate better terms with TV networks.

"Not in a seller's marketplace; in a buyer's marketplace it might be helpful. There is no fear at any network that they will be shut out of all that money," he said.

But Schulman added: "I would rather be in a position to strike the fear of God in the networks. Certainly, the size is impressive, and it might get the networks to pay a bit more attention to how they get a piece of the pie."Michael Jeary, of New York ad agency Della Femina/Jeary &Partners saw little change in the advertising landscape as a result of a WPP-Y&R deal. "I don't believe it will have any dramatic effect on an industry that has already been defined by WPP and Interpublic. It's no more than consolidation and about rankings in AdWeek and who really cares?

"You still have a bunch of duelling giants on one side and responsible independent agencies on the other," he said. "(But) for some clients who want a global presence it will be more efficient getting the message through," said Jeary.

Rich Melin, media director of the Cramer-Krasselt agency inOrlando, Fla., said a combined WPP/Y&R "could have an impact in the US having so many different brand names under one umbrella. But it's more likely to have an impact overseas," he said. "Look at the UK for example, where about 80 per cent of all ad revenues in the media come from about six companies."

Asked the benefit to a media company of dealing with such a large advertising firm with so many brand names, Melin said: "If they can get one-stop shopping, they might like to get it. But I'm not sure if that is practical."