Draft buoyant about entering uncharted waters

Three months on, Howard Draft is confident the scale of the Draft FCB venture will lead to success.

And so it is done. Howard Draft, the man who is seeking to reinvent the way ad agencies operate, has released in detail how he, as the chairman and chief executive of the newly formed Draft FCB, has pulled together the two agencies on a global scale.

How successful the Draft FCB Group proves to be, remains to be seen, but Draft is right about one thing: he is entering uncharted waters and the thought of the turf wars that could erupt as two different cultures become one is an awesome prospect.

But three months on and Draft has bought together some 3,000 employees spread among 37 Draft offices worldwide, with about 6,000 FCB staffers distributed among 190 offices globally.

Now his empire is to be expanded even further after last week's announcement that Draft FCB's Interpublic parent is to align its Initiative media network with the newly merged operation. Initiative will remain separate but is likely to report to Howard Draft.

The move is another step towards the creation of a global integrated marketing organisation with a single balance sheet and management team. But the marriage of Draft and FCB has not lacked the usual rhetoric that accompanies news of a restructure. And many have questioned Draft's logic.

FCB insiders feared that the agency, which is struggling to recreate its former glories, would be subsumed by the stronger Draft and downsized, as IPG looks to reduce overheads.

One agency source says: "FCB as a standalone network would not have grown at the level necessary to help IPG's shareholders. This is not a merger of equals. One culture will dominate the other."

The raison d'etre behind the new agency structure is, as Draft explains: "To bring a global scope to a new agency model and destroy the lines of specialism in the industry. With this new model under one P&L, the agency is biased to no discipline, there is no above the line, no below the line, no off or online. We are simply offering solutions that meet the consumer's needs."

The new Draft FCB has taken on a new tagline of sorts: "Return on ideas." It sounds clever, but some have criticised the new agency for simply focusing on an in vogue buzzword of the advertising industry - "accountability".

However, like it or not, advertising is now almost always only about return on investment, something the Draft end of the industry has proved good at tracking and delivering. The big above-the-line idea that used to manifest itself in unforgettable advertising, something traditional agencies such as FCB were in business to deliver, seems all but a dinosaur now.

One industry source says: "Return on investment is not a new idea, but it's a good idea. The issue with Draft FCB is will it truly be integrated? It needs to recruit the experience in senior ranks of people who have above- and below-the-line experience and have worked on global brands. There could be a tendency for staff to slip back into what they know best."

A good example of experience across the board is Nigel Jones, the co-president of Draft FCB London. He has ten years of through- the-line, classic brand advertising and strong response know-how.

Jones claims the group has embraced integration. "We are not catching up, we are already ahead of the game," he says. "As a merged group, about 40 per cent of our income already comes from digital."

However, one potential problem is client conflict. FCB handles SC Johnson and Motorola, while Draft is the lead network on the Procter & Gamble and Nokia clients.

Again, Draft is bullish in disregarding any suggestion of major defections. "So far, no client has shown any dissatisfaction with the move and we will be addressing conflicts," he says. "But it is not something we are worried about."

Whether the merger will make for a healthier bottom line or not is open to question. FCB and Draft are substantial operations in the US, but are weak beyond their home market. It is hard to see how FCB London and the more delicate FCB European offices will benefit.

Draft explains: "The scale of Draft and FCB's operations in Europe aren't as big as those in the US, but, by combining the agencies, they will have very powerful offices, with complementary skills, on a global scale. Just look at the UK. How many agencies are running around London with 290 people?"

The fact the Draft name comes first leaves no doubt about who is in the driving seat, but if there were ever fears FCB staff would end up feeling like the poor relation, they needn't have worried. If anything FCB heads, and not those at Draft, have taken a precedence among the top brass.

So what about redundancies? "You can't have two people running every department, can you? Draft says. "Where we can make back-office savings, there will be cutbacks. We don't need multiple finance departments. We are keeping redundancies to a minimum."

This isn't the first time Draft has been linked with a merger. In January 2003, IPG was in advanced discussions about merging Draft Worldwide with Lowe. The move could have improved the networks' integrated offers and saved costs. However, in April of that year IPG stepped back from a full merger. Instead, it announced the two agency networks would form an alliance called Lowe & Draft to pitch jointly for work.

So what makes this different? Draft explains: "There have been a lot of times I felt if we could get a general agency to be part of us, we could change the game. Today, clients are looking for this sort of global integrated solution and nobody has done it before."