CLOSE-UP: LIVE ISSUE/INTERPUBLIC GROUP - IPG’s heir apparent faces toughest challenge yet. John Dooner must expand the group’s global offering, Francesca Newland writes

WPP’s chief executive, Martin Sorrell, and Omnicom’s president and chief executive, John Wren, have successfully positioned their networks as total communications providers - not simply glorified advertising agencies.

WPP’s chief executive, Martin Sorrell, and Omnicom’s president and

chief executive, John Wren, have successfully positioned their networks

as total communications providers - not simply glorified advertising

agencies.



In this respect the Interpublic Group trails its rivals and, as the heir

apparent to chief executive Phil Geier, the job of changing this

perception and proving to Wall Street that there’s more to IPG than just

McCann-Erickson lies with John Dooner, the new president and chief

operating officer of IPG.



The IPG share price has been less than stable over the past few

months.



From a 52-week high of dollars 58, shares bombed earlier this year to

dollars 34. They bounced back to dollars 47 with the news that the

succession plan for IPG is now in place, giving the 51-year-old Dooner a

vote of confidence.



Jerry Judge, the president of Lowe Lintas & Partners Worldwide, is not

surprised: ’He’s younger, well respected in US business and successful

at McCanns. He’s a good guy.’



And, as Geier points out, if IPG is run well a buoyant share price will

follow. He says: ’If the clients and the business develop well over time

and all constituencies - clients, employees and shareholders - are aware

of it, Wall Street will be satisfied. The share price is not our number

one priority, good overall performance has to come first, then the share

price will perform as well.’



Observers believe that gaining critical mass will be key to this

performance.



IPG needs to acquire another network if it is to keep pace with its

competitors (since merging Lowe with Lintas it only has two). It was

pipped to the post last autumn when talks with the MacManus Group ended

abruptly with the news that that MacManus was doing a three-way deal

with Dentsu and Leo Burnett instead.



Geier says: ’Unless an acquisition makes sense for the clients involved

and there is a meaningful support system and the right chemistry, plus a

real return on investment, it’s not for us.’



He is keen to explain the kind of acquisition he hopes to make: ’Not

quick buck guys ... A lot of prospective companies are now willing to

take a more meaningful longer-term involvement approach rather than

simply demand top dollar.’



As the chairman and chief executive of McCann-Erickson Worldgroup since

1997, Dooner has proved his relevance to IPG’s future. The unit was

formed to develop the network’s non-advertising-related businesses. He

predicts that the operation will account for more than 30 per cent of

the McCann network’s business in 2001. The area needs attention at Lowe

Lintas and Geier is promising healthy diversification: ’Lowe Lintas is

now making sure that it has the tools to drive its business on a

worldwide basis. Over the next six months we will strengthen the Lowe

Lintas offer - their deliverables - in areas that McCanns now has in

place.’



Since taking charge of the McCanns network in 1994, Dooner’s track

record has been impressive. Under his leadership, the network’s billings

tripled and it was twice voted Global Agency of the Year by Adweek and

won Advertising Age’s Agency of the Year award in 1999 .



Dooner, like Geier, believes in a client-focused approach. He is famous

for saying that managing clients is his day job while managing agencies

is his night job. Ben Langdon, the chief executive of McCanns in the UK,

says: ’He starts his analysis from what clients want and then takes it

from there.’



One of the big challenges that Dooner will face when he takes over at

the beginning of next year will be bedding down the Lowe Lintas

merger.



In some respects he’s perfect for the job: he worked at Lowes for 11

years before moving to McCanns in 1984, so should understand some of the

Lowe Group’s cultural sensibilities.



He may have done a fantastic job with the fortunes of McCanns but it is

a very clinical agency. Lowe has a less practical British style, which,

with its high-creative standards, is at the centre of its client

offer.



Making Lowes as efficient as McCanns puts the former agency’s raison

d’etre at risk.



With McCanns’ former vice-chairman Michael Sennott made deputy chairman

of Lowe Lintas at the time of the merger and now that Dooner has been

handed the helm of IPG, the holding company has become very

’McCanns-heavy’. There is more risk than ever of IPG becoming McCanns

plus a couple of add-ons and of Lowe feeling like a second-class

citizen.



There are rumours that, in order to balance the power and soothe the ego

of Frank Lowe, founder of the Lowe Group, he will be offered the helm of

a more closely aligned Lowe Lintas and Initiative, the former Lintas

network’s media affiliate. Geier does not deny the rumour. He says:

’Lowe Lintas continues to work closely with Initiative and probably more

so in the future ... Frank is managing everything to do with Lowe

Lintas.’



The likelihood of such a move is enhanced by the fact that Dooner

approves of the McCanns model, where Universal McCann is the media

subsidiary of McCann-Erickson. A senior source close to Dooner says he

is a ’passionate believer’ in this way of operating.



Dooner is a very capable individual and, given his track record in

diversification, he is the natural successor to Geier. But his method of

success at McCanns, which has led to an enviable bottom line, will need

adapting when applied to Lowe Lintas. The currency of that agency is its

culture and having a replica of McCanns would, in the long term, limit

IPG’s offer and hinder its ability to compete with rivals like WPP and

Omnicom.



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