BIRTH OF A NEW GOLIATH: B COM3, the new mega-alliance between Dentsu, MacManus and the Leo Group, is to be the last word in global shops, say its founding partners. Jade Garrett reports

The world’s media press were there, squeezed into a conference room at Leo Burnett’s Chicago headquarters, waiting with baited breath to hear Roger Haupt unveil the new identity for the world’s latest communications conglomerate.

The world’s media press were there, squeezed into a conference room

at Leo Burnett’s Chicago headquarters, waiting with baited breath to

hear Roger Haupt unveil the new identity for the world’s latest

communications conglomerate.



After sorting through more than 10,000 suggestions from employees within

the three networks, the name chosen to replace BDM as the brand for the

holding company which embraces the Leo Group and the MacManus Group

(backed by a substantial minority Dentsu stake of approximately 20 per

cent) is B COM3 Group.



B COM3 is, apparently, derived from the word ’beacon’, a source of light

or inspiration taken to the third power to represent the three agencies

involved. A slightly tenuous link, perhaps, and one that demands an

explanation.



There is an immediate feeling among the assembled press that the

partners have jumped straight on to the dotcom bandwagon and that Leo

Burnetters will immediately associate the ’B’ with that agency.



Nevertheless, B COM3 has arrived, and not before time. BDM was starting

to feel a little too comfortable. The new name also means a small

windfall for several of the company’s employees who, along with the

person who chose the winning name, will share a stake in a dollars

50,000 prize.



Haupt, the chief operating officer of the Leo Group and the new

company’s chief executive officer, is accompanied by Roy Bostock, the

chairman and chief executive officer of MacManus, who becomes B COM3’s

chairman; Rick Fizdale, the chairman of the Leo Group, who becomes the

vice-chairman; and Yutaka Narita, the president of Dentsu. Craig Brown,

previously the vice-chairman of the MacManus Group, assumes the position

of president and chief operating officer.



Narita, flanked by no fewer than 15 Dentsu representatives, was

attending his first press conference outside Japan. To mark the

occasion, he delivered his speech entirely in English. The onus will now

be on Haupt to return the compliment on his next visit to Tokyo.



Press conference over, in a rare interview with the three partners, I

asked how they intend to position and run what Bostock refers to as ’the

world’s premier advertising, marketing and communications company - one

that is unique because nobody has the presence in the two largest

markets in the world (the USA and Japan) that B COM3 has’.



Bostock will no doubt be challenged on that score by his rivals but, for

the time being, the partners are confident that B COM3 will be a force

to be reckoned with. ’Fit is a word that comes to mind,’ Haupt explains.

’This is a rapidly changing world and we all had to sit down

individually and see if we were able to effectively compete in the long

term. We all concluded that it was not going to be possible.



’We were faced with two choices: one was to sell, but we didn’t think we

would ever get the fit we would by partnering MacManus and Dentsu. This

way we have no fall out, we all feel in control of our destiny and we

can continue to leverage our strengths in our own ways.



’It has enabled all three partners to get to that level of scale and

size that is required to compete globally over time. It is simply a

three-way partnership that we looked at and said: ’Wow! That does it for

all of us with no downside.’ It makes nothing but good sense.’



For Dentsu, the alliance marks its first real chance to make a serious

impact on the Western market - a feat that Narita admits was proving

impossible for the agency on its own.



’We have been able to satisfy our clients’ needs in Japan but their

activities are becoming more globally orientated,’ Narita says. ’They

have asked for the same level of service overseas. Dentsu alone would

not be able to provide that. Mutual respect and trust is essential.

No-one is perfect so we have to complement each other. We have to learn

something that we don’t already have. We share the same corporate

philosophy and a respect for tradition and heritage. I have a tremendous

respect for Leo Burnett and MacManus and that is why I have decided to

become part of this alliance.’



Dentsu will have two directors on the B COM3 board and will be closely

consulted on all strategic decisions, Haupt says. The strategy will be

one of ’co-operation and collaboration’, marking B COM3 out from other

major world groups which compete aggressively against sibling

agencies.



Over the next 18 months, we can expect to see B COM3 ’aggressively

invest’ and expand its portfolio in the direct, database and e-commerce

sectors.



When clients want the B COM3 agencies to combine, they will. But when it

comes down to the wire, who gets the final word?



’I hope it won’t get to that,’ Haupt says. ’We’ve put a major deal

together very quickly, lots of different things have come up in

discussions, we’ve solved them amicably and that’s the way we intend to

go on. I won’t sit here naively and say that there won’t be differences

of opinion but I’m very optimistic that we’ll work them out.’



Bostock has a different take on the matter: ’If there are any

differences, the chief executive will make the call, so if there are any

problems it’s Roger that’s got to solve them.’



Ownership is a subject Haupt feels less at ease discussing beyond

confirming Dentsu’s 20 per cent stake. He won’t be pushed on how the

remaining 80 per cent is broken down.



’We’re all shareholders in the same company and I don’t think its

appropriate to break it down. It’s private information and really not

relevant anymore. It’s one company now,’ he says.



And what of the timing? B COM3 will have to compete with the might of

WPP, IPG and Omnicom, each of which has firmly established its foothold

in the market. ’Becoming a holding company after others have done it is

not a downside,’ Haupt says. ’You can learn from having watched what

others have done and in some areas I hope we might be able to cut a few

corners and get there a little faster.’



Media is one area over which a huge question mark still hangs -

something Jack Klues, the chief executive at Starcom, anticipates will

be resolved in a matter of weeks. Most view a merger between Starcom and

MediaVest as the obvious solution. The two have worked together recently

to great effect.



Both formed a joint venture in China last December, temporarily called

Quest, to pitch for and subsequently win what was the largest account

shift in Asia outside of Japan - the dollars 150 million Procter &

Gamble media assignment. In the last couple of weeks, the two have again

combined to win the P&G business in Greece. Neither Starcom nor

MediaVest can alone claim European or global superpower status. Why

shouldn’t the philosophy that brought the Leo Group and the MacManus

Group together be equally applied to media operations?



A merger between Starcom and MediaVest in the UK would create the

country’s second-largest media shop with billings in excess of pounds

600 million. It would undoubtedly give the two greater clout to bully

media owners into submission on price and would also provide a

compelling case for P&G to centralise its entire UK account into B

COM3.



True, Klues says. They already share Fiat, so a model exists on how the

two might work together. ’It would be an easy answer to say ’well, of

course, you’d put the two together’ and scale is very important,

particularly in the UK. But I, for one, do not think that scale alone is

going to be the proper positioning for B COM3 media entities in the UK.

I think we need to be a little more ahead in terms of positioning.’



Is there a chance then that the two would combine purely from a buying

perspective? ’Yes that’s an option, it certainly is,’ Klues says. ’It

would be outside the boundaries that we have built Starcom on and I

would need more help from my MediaVest partners on how that might be

most viable in the UK. I don’t want to discount it because I don’t know,

but I find myself in a ’not invented here’ mindset.



’Regardless of what we do between MediaVest and Starcom/Motive, you have

to find a smart way to take the best of your people on those shared

clients, the best tools for those clients, and provide a clearly

focused, single point of accountability operation for those

multinationals.’



And where does that leave CDP Media - the Dentsu joint venture with CIA

in the UK? ’I would find it unlikely that CDP Media would be immediately

bundled together into B COM3,’ is as much as Klues can offer on the

subject.



At the holding company level, though, many question marks have already

been ironed out. Haupt, Bostock and Narita are clearly very relaxed in

each others’ company which, as Haupt points out, is some achievement

given the task which lay ahead of them just six months ago.



’Bringing together something as a threesome is no easy job because you

are constantly trying to reconcile what each party may want out of a

deal like this. I can only describe Dentsu as a very straight arrow.

They say it the way they see it and they support what they say. I never

had to worry that when Dentsu said something it was what they meant. I

never had to look over my shoulder once and I found Roy has a great

sense of humour, Haupt says.



Despite the almost regal air that surrounds Narita, his speech at the

press conference showed an informality that few would associate with the

man responsible for running Japan’s number one agency. ’As you may

know,’ he said, ’Major League baseball opens its season in Japan this

year.



The Chicago Cubs will play the New York Mets in Tokyo. I believe that

destiny plays a part in this. We hope to create advertising headlines to

rival the news of Sammy Sossa’s home runs.’



He also shared with us the codename which the partners had been using

for the project: Nomo, which for those of you not up on your baseball

trivia is the name of the Japanese pitcher for the NY Mets.



When asked what the key will be to B COM3’s success, Haupt says that the

only vote that counts will be that of the client, and if the reaction of

John Smale, the former chairman at P&G and now an outside director of

General Motors, is anything to go by, it should be plain sailing. He is

said to have described the deal as the smartest he’s ever seen.



’I think that any clients we work with in Japan have just got to be

salivating at our ability to partner with the biggest agency there and

what we can leverage now for them,’ Haupt says. ’Equally, Dentsu can now

tap into two of the largest agencies in the States. Add to that the

media power of Dentsu, MediaVest and Starcom and we can now take that

power, that learning and all that intellectual capital and start pushing

it back between all the countries in-between.’



Haupt and Bostock have had relatively little time to get to know their

new partner but you wouldn’t notice. They’ve shared their first meal -

steak and rice to satisfy the culinary traditions of both cultures -

exchanged gifts and started to organize their first game of golf.



’Narita San and I are going to play golf in Tokyo and then in New York,’

Bostock says. And what will Haupt be doing while the two of them are

practising their backswings? ’We’re not sure yet,’ Bostock quips. ’We

might teach him to play, or he’ll be our caddy.’



Topics

Become a member of Campaign from just £45 a quarter

Get the very latest news and insight from Campaign with unrestricted access to campaignlive.co.uk ,plus get exclusive discounts to Campaign events

Become a member

Looking for a new job?

Get the latest creative jobs in advertising, media, marketing and digital delivered directly to your inbox each day.

Create an Alert Now

Partner content

Share

1 Job description: Digital marketing executive

Digital marketing executives oversee the online marketing strategy for their organisation. They plan and execute digital (including email) marketing campaigns and design, maintain and supply content for the organisation's website(s).