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
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
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.