FCB plans own European network

Foote Cone Belding is attempting to build a European network of its own after last week’s dissolution of the alliance between its True North parent and Publicis.

Foote Cone Belding is attempting to build a European network of its

own after last week’s dissolution of the alliance between its True North

parent and Publicis.



Both parties bowed to the inevitable with a deal allowing the

Paris-based Publicis to take full control of its joint venture European

network in return for True North acquiring FCB agencies in London,

Paris, Athens and Lisbon.



The four shops will provide the nucleus of a network when they are put

together with Wilkens International, the former Ayer Europe operation

acquired by True North earlier this month.



As a result, the Wilkens agencies will be rebranded as FCB, except in

Germany where it is the country’s oldest and best-known agency.



Harry Reid, the president of FCB International, will run the network out

of London, helped by a transitional committee comprising senior

executives from Wilkens and major FCB European offices. It will decide

how the new operation is to be structured.



Although the split means FCB has to build a European network virtually

from scratch, Chris Rendel, the managing director of FCB in London and a

member of the committee, denied it was at a disadvantage.



’Most of our competitors put their networks in place ten or 15 years

ago,’ he said. ’We can position ours in a new and unique way.’



One matter to be resolved following the split is whether FCB Europe will

continue working with Optimedia, the Publicis-FCB media buying

operation, or be forced by conflicting business to build its own media

network.



Reid said: ’I don’t rule out a separate media function but we’d like to

see if we can make it work with Optimedia first.’



The effect of a switch from Optimedia would have a relatively minor

effect on the media network’s UK office, which works with Publicis on

the majority of its business.



Also to be decided is what, if any, part will be played in the new

network by Leagas Shafron Davis. Although Wilkens has a 12 per cent

stake in the agency, the True North takeover allows Leagas Shafron to

buy the shares back if it wishes.



Leagas Shafron could decide to stay on board if there is a prospect of

getting a significant amount of referred business. Ron Leagas, the

Leagas Shafron chairman, said: ’We’re in the middle of discussions.’



The establishment of FCB Europe is part of a wide-ranging divorce

settlement thrashed out during a two-day meeting in Paris last month

between Maurice Levy, the Publicis chairman, Brendan Ryan, his FCB

counterpart, and other members of the True North board.



The deal not only ends all legal claims each side has made against the

other, but commits FCB to selling to Publicis its interest in a South

African agency. The settlement will also help Levy establish separate

operations in Argentina, Australia, New Zealand, India and Thailand.

Both parties will service each other’s clients in countries where having

two agencies would be impractical.



True North will increase its stake in Publicis Communication, the

Publicis advertising division, from 20.8 per cent to 26.5 per cent,

while Publicis’s 20 per cent share in True North sustains its position

as the US group’s largest shareholder. Each company will maintain a seat

on the other’s board of directors.



Along with Reid and Rendel, the transitional committee will consist of:

Robert Hamer (the chairman of FCB UK), Philippe Gaumont (the chief

executive of FCB Paris), Fernando Okana (the chief executive of FCB

Spain), Roy Powell (the chief executive of FCB International), Holger

Uhlhorn (the chief executive of Wilkens) and Andrew Stewart (the

financial director of Wilkens).



The agreement ends what has turned out to be one of the most ill-starred

global agency pairings and reflects how much the aims and ambitions of

Publicis and True North have changed since they came together in

1988.



Optimedia’s main UK clients

CLIENT                                  BILLINGS

PUBLICIS

General Accident                     pounds 4.6m

Hewlett-Packard (pan-Euro)           pounds 30 m

L’Oreal                             pounds 9.4 m

Lancome                              pounds 3.2m

Mastercard                          pounds 5.4 m

Mercantile Credit                   pounds 5.4 m

MFI                                  pounds 18 m

Renault                             pounds 34.6m

Royal Doulton                          pounds 3m

Whirlpool                              pounds 2m

Whitehall Laboratories               pounds 5.5m

Other accounts                      pounds 5.4 m

Total                              pounds 126.5m

FCB

Citibank                               pounds 2m

Daily Mail                           pounds 5.3m

Royal London Assurance               pounds 1.8m

Tropicana                              pounds 2m

Other accounts                      pounds 1.05m

Total                              pounds 12.15m

THIRD-PARTY BUSINESS

Bright Reasons                         pounds 4m

British Airways                       pounds 15m

CIC Video                            pounds 2.6m

Gateway 2000                         pounds 3.8m

Glaxo corporate                        pounds 2m

People’s Bank                          pounds 4m

Pizzaland                            pounds 2.2m

Ralph Lauren (pan-Euro)               pounds 10m

Other accounts                       pounds 9.5m

Total                               pounds 54.7m

Source: ACN MEAL/Optimedia.



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