Not so long ago, True North could have named its own price for
selling out to one of the leviathans of international advertising. But
the loss of DaimlerChrysler last autumn to BBDO means that Interpublic
has been able to strike a flash deal on several counts.
It is good for IPG's chief executive, John Dooner, who has flexed his
muscles as a corporate jockey by beating Havas to True North, and after
only three months in the job. It makes IPG the biggest player of the big
three in a world where big is beautiful: with three global ad agencies
instead of two, Interpublic's chances of being invited on to the
pitchlists for worthwhile global accounts automatically rise by 50 per
cent. The deal brings a greater ability to handle client conflicts and
more clout with media suppliers.
The good news does not stop there. True North brings several respected
managers to Interpublic's board - in particular, its chief executive,
David Bell, and the chief executive of FCB Worldwide, Brendan Ryan. So
why are observers talking in rather lukewarm terms? Why has
Interpublic's share price not gone through the roof?
It is partly because True North is fairly dependent on traditional
advertising - while other elements of the marketing mix are growing
faster - and on North America, where the economy is slowing down. And
then there is the timing issue. IPG has its plate full trying to speed
up the turnaround at Lowe Lintas, particularly in New York, not to
mention bedding down its other recent purchase, Deutsch. There is a
sense that Dooner is only just starting to feel his way around the
non-McCann parts of IPG's empire. Now he will have to spread himself
even more thinly.
True North's haste to do the deal with IPG is, however, easily
explained. The continuing consolidation of global advertising means that
for mid-sized holding companies such as True North, Cordiant and Grey,
selling out was inevitable. Had Bell and his board waited any longer,
Havas - which is believed to have offered as much as dollars 45 a share
- might have been the buyer.
WPP buys Y&R, Publicis buys Saatchis, Havas buys Snyder ... these are
the kind of deals that have Campaign reporters examining each side's
client lists with the whiff of a review in our nostrils. This case
throws up its own juicy leads: Tropicana (FCB) versus Coke (McCann,
Lowe); Compaq (FCB) versus Hewlett Packard (McCann); AT&T (now under
review at FCB) versus HSBC (Lowe) and Deutsche Bank (McCann). But the
fact is that conflicts are, of necessity, becoming less of an issue
It's tempting to suggest that within a few years most clients will be
happy to have their direct competitors serviced by the same holding
company. And, of course, for every conflict IPG now has an opportunity.
FCB has gaps for clients in several categories, notably cars. Will
Dooner use his standing at General Motors to steer some non-IPG GM
business FCB's way? You'd better believe it.