CAMPAIGN DIRECT: ISSUE FCB WORLDWIDE - A new world order for True North below the line/The DM operations of Bozell and FCB look likely to flourish in the merged company

The analogy of corporate mergers and marriage has been made countless times, usually to convey nothing more than the act of union. But the similarity certainly doesn’t end there: there are issues, repercussions and compromises that need to be addressed, and unforeseen problems can rear up from the most unexpected quarters.

The analogy of corporate mergers and marriage has been made

countless times, usually to convey nothing more than the act of union.

But the similarity certainly doesn’t end there: there are issues,

repercussions and compromises that need to be addressed, and unforeseen

problems can rear up from the most unexpected quarters.



Over the past weeks, you may have noticed the frenzied speculation

surrounding the merger of True North’s major networks, FCB and Bozell,

which have been rechristened FCB Worldwide. That’s hardly surprising.

The combined network now has number one status in the US with combined

billings of dollars 532.7 million, and has instantly become the world’s

fifth largest network.



And many analysts believe this is only the beginning of a period that

will see rapid expansion: it has been suggested that True North has an

extensive shopping list, with Grey, Bates and Saatchi & Saatchi among

its prime targets. Such an acquisition could catapult it into the same

league as Omnicom, WPP and Interpublic. This is a time of change and

consolidation for the company, and major restructuring is inevitable.

There has already been some fallout in the UK, with Delaney Fletcher

Bozell relaunching as Delaney Lund Knox Warren after a management

buy-out.



Clearly, the FCB/Bozell merger is a complex and multifaceted affair. And

what happens further down the line is yet to be revealed. Merger ripples

spread across the corporate pond; while the epicentre remains calm it’s

the outer reaches that tend to feel the full force of the turbulence.

What effect, for example, will the merger have on True North’s

below-the-line offering, particularly in Europe and the UK? It’s crucial

that a coherent plan be put into action quickly. Advertising history has

shown that mergers often come unstuck when too much heed is paid to the

bigger picture and too little to the finer details.



David Bell, the chief executive of True North, feels below the line will

play an increasingly important part in the network’s fortunes. In a

recent Campaign interview, he predicted that what he calls True North’s

’media neutral’ (non-advertising) interests will ’move up the food

chain’, providing they ’are able to collaborate with others in the

group’.



Other than advertising, True North has interests in PR and interactive

advertising, and is looking to increase its presence internationally in

design, sales promotion and relationship marketing. Its direct offering

consists of FCB Direct and Marketing Drive, which was acquired in 1998

by Bozell. BSMG, the True North-owned PR company, also offers direct

capabilities.



The effective collaboration that Bell talks about would seem to be the

key driver in True North’s plans for its substantial roster of

below-the-line interests: allied companies operating as separate profit

centres, but pooling skills, ideas and resources, in a kind of

continually shifting Venn diagram of associations.



Marketing Drive Worldwide, which has headquarters in London and

Connecticut and is run by the two joint chief executives, Mark Timbrell

and Wes Bray, is expected to play a pivotal role, acting as a centre of

excellence.



It expanded to take in the bulk of True North’s worldwide marketing

services agencies during the summer, and runs 23 offices in nine

countries with estimated billings of dollars 450 million. Bell commented

that ’the standalone units from across True North that are now part of

Marketing Drive have collaborated successfully in the past and this move

is a natural evolution of that spirit of co-operation.’



Timbrell, the London-based joint chief executive, said at the time of

the worldwide realignment: ’Clients want ideas that build brands,

generate response and create life-long relationships with customers.

That’s the vision we bring to Marketing Drive Worldwide.’



For US-based Bray, the network merger offers a wealth of

opportunity.



’In a way, we view the other large agencies (in the True North network)

as internal clients. The stronger the network, the greater the need for

below the line,’ he explains. He sees Marketing Drive working in tandem

with FCB Direct, ’integrating across the company. FCB have their own

direct capability, so we probably won’t be too involved with them on

much direct work, but we could help out on, say, branding and packaging.

There may also be issues of conflict or capacity where we could get

involved.’



As Bray points out, this mix-and-match offering is similar to the way

Marketing Drive has been operating for some time. It’s just the scale

and level of opportunity that have increased. ’Rather than one size fits

all,’ he says, ’it’s a case of using an array of capabilities to fill in

where FCB may not have that capability. Each project will be handled on

its own merits, we’ll be giving clients what they want rather than

something that may not be appropriate.’



Clearly, there are some clients who stand to benefit more than others

from the new-look direct offering. Bray mentioned Tropicana, for which

FCB handles the global advertising account, as a specific example. They

don’t use below the line extensively, but may be tempted to call upon

Marketing Drive’s experience in the FMCG area.



Financial institutions, which use FCB for principal direct services, are

less likely to need Marketing Drive’s expertise. Unless, that is, they

wanted help with branding or corporate identity. ’The idea is to match

the skills set across the specific need of the project,’ Bray says.



Harry Reid, FCB’s London-based international president, says the merger

won’t affect True North’s direct offering. And he is keen to emphasise

the strategic differences between FCB Direct and Marketing Drive: ’The

latter is a sales promotion company, whereas FCB Direct is a direct

marketing company.



They are two quite separate operations. Marketing Drive reports to True

North.’



Although it is thriving in the US, FCB Direct needs to bolster its

presence in the UK and Europe. Indeed, its worldwide president and chief

executive, Stewart Pearson, has relocated to the UK. Pearson has a

formidable pedigree: he has worked for Ogilvy & Mather Direct (now

OgilvyOne), DMB&B Direct (now IMP) and his own start-up, Pearson Paul

Haworth Nolan. Most recently he was based in Hong Kong as FCB Direct’s

regional director, integrated marketing, and then in New York as

worldwide chief executive.



Pearson is on the domestic acquisition trail and will work alongside

Reid to bring the FCB Direct brand to prominence on the UK direct

marketing stage. ’Bozell hasn’t invested in direct in the way we have,’

Reid says.



’Our investment in the FCB Direct brand will continue and, if anything,

will be pursued with even greater enthusiasm.’



What about the spirit of co-operation and joint initiatives that Bray is

so keen on? ’I’m not ruling out collaborations,’ Reid says. ’So long as

they have the client’s best interests in mind. I can envisage joint

pitches where they are appropriate. BSMG might be brought in as well for

further collaboration.’



In theory at least, the FCB/Bozell merger offers the network’s

below-the-line operations increased fluidity and flexibility.



The stronger multi-disciplinary offering can only benefit clients

looking for integrated marketing solutions. The practice, of course, is

a completely different issue. It remains to be seen whether the

psychological and cultural divide between the FCB and Bozell networks

can be bridged, and whether the realigned direct networks can operate in

a truly mutually beneficial manner.



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