PERSPECTIVE: Opportunity knocks for Publicis, but will its clients approve?

An old proverb says ’opportunity makes the thief’, and it looks as if Maurice Levy could just be about to slink away with one of the jewels in advertising’s crown.

An old proverb says ’opportunity makes the thief’, and it looks as

if Maurice Levy could just be about to slink away with one of the jewels

in advertising’s crown.



Opportunity is dangling Young & Rubicam before the nose of the Publicis

chief and Levy knows the main chance when it rings him up and invites

him to take the seat at the negotiating table temporarily vacated by

WPP’s Martin Sorrell.



A deal between the two agencies would create a dollars 27 billion

powerhouse with worldwide incomes of more than dollars 3 billion. And if

Sorrell’s talks stalled over issues of autonomy, then a Publicis/Y&R

deal appears to afford a somewhat more comfortable fit. Excruciating

client conflict aside (Ford and Renault, for all the talk about a more

relaxed climate for client conflict, would be tricky bedfellows to

manage, but not impossible), both agencies share an entrepreneurial

management style and there seems, too, to be more hope of a true

partnership.



Levy, of course, has been here before. As the Publicis/True North fiasco

proved, equal partnerships can also mean the crippling deadlock of

management by committee. But Levy is nothing if not a pragmatist and the

acquisition of Fallon McElligott gives Publicis a new US platform to

ensure a more equitable marriage of equals.



Then there’s media. Publicis’ Optimedia network is a middle-ranking

player in a market where size is key. Y&R’s Media Edge is hardly more

impressive, with a fudge in Europe that could soon begin to prove

positively detrimental to growth.



Together, however, total billings would approach dollars 15 billion and

would bag the group a coveted top three global media slot.



An irresistible combination? Throw in Y&R’s sterling array of marketing

services companies and it’s beginning to look like a pretty attractive

pairing, though City analysts have not exactly been enthusiastic

(Publicis’ stock is relatively highly valued and a share swap would

prove lengthy since Publicis would have to issue US-listed stock.)



But there’s something about this budding alliance that takes the shine

off such a winning formula. It comes back to the issue of

opportunism.



Sorrell, for all his bullishness, has steered a determined course

towards Y&R for some time. It’s not a must-do deal for a FTSE star

performer such as WPP, sitting comfortably in the upper echelons of the

agency league tables, but at the right price and with Y&R’s management

support it would have been a nifty move, not least because of the lack

of client conflict and the shared Ford business.



Publicis, on the other hand, was minding its own business till Y&R,

looking for a white knight, came knocking. Perhaps a marriage of

convenience would work, but seizing the opportunity presented is only

the start. There are many clients who will need convincing that any

Publicis/Y&R deal is about more than a defensive scramble for size and

the chance to thumb the nose at Sorrell.



Caroline Marshall is on maternity leave.



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