Acquisition to increase IPG's international DM standing

The True North and Interpublic deal is not likely to bring

immediate changes for Interpublic's three main marketing services

networks but will move IPG into third place in the league of global

direct-marketing players.

Lowe Live, McCann Relationship Marketing Worldwide and Draft Worldwide

all operate separately as part of IPG networks rather than through a

central marketing services division such as Omnicom's DAS. It is likely

they will continue to run in this way.

However, the enlarged IPG is likely to set up a committee to look at the

possibilities of synergies in marketing. True North's Marketing Drive

Worldwide marketing services network, with its roots in sales promotion,

has more in common with Draft than the other two IPG marketing services

groups. IPG may consider ways in which the networks could work


IPG derives 41 per cent of its revenue from marketing services,

including dollars 1.2 billion from direct marketing and promotional

marketing. True North is a much smaller player with dollars 365 million

in revenue coming in this area.

The True North acquisition will also bring IPG a significant 45 per cent

stake in Modem Media, the global digital agency that has clients

including Unilever and General Motors. FCB's interactive company, FCBi,

also possesses an international network.

The deal will put IPG third among the networks in its PR holdings. True

North's BSMG Worldwide network is the UK's sixth-largest agency group

and boasts strength in City PR, following its acquisition of Square

Mile, and lobbying, through GJW. IPG is likely to consider locating True

North's PR interests within its Allied Communications group that

includes Golin/Harris, Shandwick and Weber PR.

The merger will also solidify IPG's top position in the global

sponsorship market.