Apple's Beats Acquisition Spurs Conflict Shop at Interpublic's R/GA

Notoriously Private Apple May Not Appreciate Sharing an Agency

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A Beats ad by R/GA this year featured Apple's iPhone.

Samsung and Beats have harmoniously coexisted on R/GA's client roster since the shop started working with the brands. But that coexistence likely has a shelf-life as Beats takes on a new parent company in Apple, one of Samsung's biggest rivals.

R/GA, which is based in New York, is now planning to open a Los Angeles-based conflict shop designed to create a firewall between the two clients, as well as any other future conflicts, Ad Age has learned.

R/GA confirmed that it has set up a separate legal entity in Los Angeles, where it runs its Beats account, but declined to disclose details around what prompted the move and its future plans for the group. The entity does not yet have a name.

"We're just working hard to do our very best work," said R/GA CEO Bob Greenberg. "With everything that will become a conflict, it's impossible for companies not to have potential conflicts."

Representatives for Apple, Beats and Samsung didn't immediately respond to requests for comment.

R/GA once handled the Beats account at the shop's London office but subsequenty moved all its Beats work to its L.A. office, where the client is based. That shift probably accounts for the L.A. office's rapid growth to 40 staffers from 3.

Apple agreed to buy Beats for $3 billion in May.

Conflicts have been an issue for large established shops, like R/GA, that service clients in most product categories.

R/GA won Samsung's North American digital marketing account last year, which ultimately led Microsoft to move business out of R/GA and to Publicis Groupe's Razorfish. "The decision to switch digital online advertising agencies arose due to competitive conflicts with the previous agency," a Microsoft spokesman said at the time.

Even more than Microsoft and Samsung, Apple and Samsung have gone to war in recent years, as evident not only in attack ads but also an email that surfaced during their highly publicized patent trial. In the email, Apple lead marketing exec Phil Schiller complained that the creative coming out of Apple agency TBWA/MAL wasn't as good as Samsung's.

It doesn't help navigate delicate conflict issues that Apple has always been a stickler when it comes to privacy around its marketing and product development, keeping a tight grip on the information to which many of its agencies are privy. The brand's unique ways have prompted agencies to go to special lengths to keep their teams separate and private, and even transport their people to Apple headquarters for long periods of time to support top-secret product launches.

Publicis Groupe's Rosetta is the latest shop to build out a separate agency group for its Apple client.

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