Interpublic Group finally woke up to the benefits of
diversification beyond straight advertising last week, by adding two
sports-marketing operations to its string of conventional agencies.
For an undisclosed sum, IPG has brought Washington-based Advantage
International and 60 per cent of the UK’s API Group into its nest of
agency networks (principally comprising Ammirati Puris Lintas, the Lowe
Group and McCann-Erickson). Together, the two new companies will form a
single sports-marketing group with initial billings of dollars 550
million and revenue of more than dollars 50 million.
The range of sports involved in the deal is substantial, offering
coverage around the world. API, founded by the British Olympic
medallist, Alan Pascoe, specialises in sponsorship sales for clients
such as the Benetton Formula One Team, and event marketing for the
Commonwealth Games Federation, among others. Advantage International
acts for stars such as Steffi Graf (tennis), Darren Gough (cricket),
Sandy Lyle (golf) and Grant Hill (basketball).
Phil Geier, IPG’s chairman and chief executive, says: ’I believe we will
be able to create a new group in this rapidly expanding area, competing
at the highest level in all aspects of global sports marketing.’
The deal may be good news for shareholders in IPG, and for the managers
at API and Advantage, as it offers access to new funds, and the
possibility of expansion. Gabe Harris, a spokesman for Advantage, for
example, hopes Interpublic’s ad agencies will ’come to us first’ when
looking for athletes to appear in advertising.
But clients at the APL, Lowes and McCanns may find it hard to see how
they benefit. If advertisers choose to use sport marketing, who’s to say
that IPG’s new sports units can offer the stars, or the events, to suit
them? And even if advertisers do select one of the Advantage/API stars
or events, how can sister Interpublic agencies honestly broker a
Won’t there be a conflict of interest?
Eugene Beard, vice-chairman at IPG, concentrates on the upside: ’This
resource is available to agencies and clients if they want it.’