Few can remember a merger that so many people from two sister
agencies have denied at such length. The feasibility studies on Ammirati
Puris Lintas merging with its fellow Interpublic network, the Lowe
Group, are grinding ahead, the key client has been called to an urgent
meeting this week, the creatives are discussing who gets the bigger pool
table ... and still there will be no decision for a week.
On paper, as I wrote here a few weeks ago, a global merger looks
APL can’t break out of its position as Unilever’s house agency and Lowe
can’t make the leap to multinational status through organic growth. Both
have suffered business losses and management problems in their New York
offices and APL’s recent loss of most of its Rover Group business
removes the conflict with Lowe’s powerful General Motors Europe client.
Merge the two and IPG could reap the benefits of economies of scale.
Three conflicts spring to mind: Lowe’s GM, Henkel and Sun Microsystems
clients, versus APL’s Toyota, Unilever and Dell. The most important is
Unilever, which is currently contemplating culling 1,200 of its lesser
brands, leaving it with 400 so-called ’power brands’ - and that in
itself will lead to a reallocation of some business.
Unilever could block the merger but it says it wants more creative
advertising and, to date, APL has not provided enough of it. Though
there are few precedents of happy marriages between blue-chip companies
and creative agencies such as Lowes, Unilever may wish to test the
waters. In any case, the chances of it firing APL in the event of a
merger it half-supports going ahead look slim. After 60 years, in one
incarnation or another, as Unilever’s house agency there’s an attachment
between APL and Unilever and an interdependence that shouldn’t be
But who could run the merged network? As far as IPG is concerned,
neither APL’s Martin Puris nor Frank Lowe are in possession of one of
the few halos that currently come in chief-executive size. Puris,
charismatic as he is, has never been considered a great operational man
as his difficulties in hiring a strong, lasting senior team around him
illustrate. The ongoing dollars 340 million lawsuit between APL and
Puris’s once heir-apparent, Rick Hadala, will not have helped his case
or prolonged his enthusiasm for sticking around. Frank Lowe has a much
better track record in hiring and keeping senior talent but he prefers
to operate well away from the hurly-burly of Manhattan and he may not
want to roll up his sleeves and plunge into the political nightmare of
Unilever. His experience with Birds Eye over ten years ago may well have
put him and Unilever off each other for life. Who knows?
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