IPG confirms merger of Draft and FCB

Howard Draft takes charge and Steve Blamer leaves as agencies become single global integrated marketing organisation.

Last week, Interpublic Group ended months of rumour and speculation by announcing that its FCB and Draft networks were merging to form the Draft FCB Group.

The decision sees the creation of a global integrated marketing organisation with a single profit-and-loss balance sheet and one management team. This will be headed by Draft's founder, Howard Draft. Steve Blamer, FCB's worldwide chief executive, is leaving the company as a result of the merger.

IPG estimates that the merger of its above- and below-the-line networks will be finished within 90 days. Until then, there will be no further information released, including details about who will control the UK operation.

However, Draft and Blamer have praised Draft London's managing director, John Minnec, and FCB's chief executive, Nigel Jones. Both are in the frame for the top UK job.

The merger is expected to throw up client conflicts that could see business flying out of the newly created network's door. There are two significant conflicts, with FCB handling SC Johnson and Motorola while Draft is on the Procter & Gamble and Nokia rosters.

However, Draft has been bullish in disregarding any suggestions of the sort. He said: "So far, no client has shown any dissatisfaction with the move and we will be addressing conflicts in the next few days, but it's not something we're worried about.

"There may be a little fall-out, as there is always bound to be with a merger, but there are no problems with Kellogg, P&G or SC Johnson."

FCB insiders also fear that the agency, which is struggling to recreate its former glories, will be subsumed by the stronger Draft and downsized, as IPG looks to reduce overheads. Draft is quick to jump on the offensive to point out the merger is not about cutting costs.

"The move is totally the opposite of cutting revenues and costs. I have already told my staff to go out and hire the best creatives in the world.

I want to hire a creative team that leaves a lasting impression on the industry for years to come," he said.

This duty will fall to FCB's Jonathan Harries, who has been named the worldwide chief creative officer of the new company. He will work closely with Draft and will be based with him in the US.

Blamer's departure has not come as a major shock. Both he and Draft had worked together to plan how the companies should be merged, but insiders said that they had different ideas on how to move the agency forward.

Blamer wanted to create a mini-holding company where the two agency brands would remain separate but report to Howard Draft. After the decision was made to follow Draft's single P&L model, Blamer announced he was leaving the company.

Blamer said: "I suggested the move for integration, then we all talked about how to execute it. I put my idea across and said 'if I don't like the outcome, I'll go'. It has all been very amicable."

Draft added: "Steve's been gallant throughout the whole thing. There was never an issue about who would be the chief executive. Steve likes to run big agencies. I want to run a major global network."

Draft, who will now become the chairman and chief executive of the joint operation, said that the decision to create a global integrated agency will see the Draft FCB Group become a major global force within two years.

"Clients are looking for this sort of global integrated solution and nobody has done it before. Once we are successful, every other network will want to follow suit. By 2008, I wouldn't want to pitch against us."

THE PATH TO MERGER
FCB
1873: Daniel Lord opens office in Chicago selling ad space
1881: Lord joined by Andrew Thomas forming Lord & Thomas
1942: Albert Lasker, who joined in 1898, sells agency to Emerson Foote,
Fairfax Cone and Don Belding
1963: FCB becomes first major agency to go public
1965 Listed on New York Stock Exchange
1980: Billings exceed $1 billion
2001: IPG announces formation of FCB Group
2001: Jonathan Harries named chairman of FCB Chicago and FCB Worldwide
creative director
2005: Steve Blamer joins as FCB Worldwide chief executive. Nigel Jones
becomes FCB UK Group chief executive
2006 Merged with Draft

DRAFT
1978: Kobs & Brady opens in Chicago with 13 staff
1982: Howard Draft opens New York office
1986: Draft named as president of the agency
1988: Draft made chairman and chief executive. Name changed to Kobs &
Draft
1995: Management buy-back from Saatchi & Saatchi. Renamed Draft Direct
Worldwide
1996: Draft becomes part of IPG. Billings reach $1 billion
2002: Lowe Live London merges with Draft Worldwide in the UK
2003: Renamed as Draft
2005: John Minnec named as Draft London managing director
2006: Merged with FCB

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