Inside the Account Move: Disney Ditches Publicis For Omnicom (But Does it Matter?)

Behind A Highly Unusual Pre-Merger Account Shift

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Monica Karo
Monica Karo

It's common for a marketer to shift its account from one agency to another without a formal review process.

But when Disney this week quietly moved its studio and home entertainment businesses' massive media account to Omnicom's OMD from 4D, a dedicated agency group within Publicis Groupe's Viviki, the shift raised more than a few eyebrows.

Omnicom has taken on the business despite a Warner Bros.-size conflict, invited the entire 4D staff to join the team and done all this in the middle of a mega-merger with the incumbent.

What prompted the move?

Some pin the shift on the recent retirement of Jack Klues, former CEO of Vivaki, as well as the realignment of Vivaki within Publicis. When Vivaki took on the business in 2011, Mr. Klues hand-picked a group of executives from Optimedia, Mediavest, Digitas and Razorfish to build 4D and handle the media account for Disney's studio, home entertainment and interactive/gaming businesses, which in 2011 composed about $800 million in measured media spending. Today, Vivaki has a new CEO in former Chief Financial Officer Frank Voris and serves as a central technology and digital-media hub rather than an umbrella group overseeing Publicis media agencies and their leaders, as it did under Mr. Klues.

Disney also went through an internal marketing shakeup in January 2012 -- too long ago to have much to do with the latest agency move. At the time, Ricky Strauss replaced M.T. Carney as head of marketing. Ms. Carney had initiated and overseen the 4D operation after she joined Disney from Naked in 2010.

Team migration
A few industry executives speculated that the changes at Vivaki, and the impending Publicis-Omnicom merger, spooked Disney. That theory would hold if the entertainment giant and OMD hadn't invited the 100-plus-person 4D team, including its president, Susan Taylor, to form the "new" account team at OMD in Los Angeles, according to people familiar with the matter. Ms. Taylor and most of her team members are expected to join.

OMD's U.S. CEO Monica Karo is leading the transition. Right after the news broke, she addressed the 4D staff in Los Angeles in person, according to one industry executive.

Ms. Karo was also likely a key player in the win. Omnicom recently boosted Ms. Karo to U.S. CEO of OMD from U.S. CEO of smaller sibling shop PHD. Before she went to PHD in 2012, she spent years in roles at Omnicom Media Group in Los Angeles, where she likely crossed paths with Ms. Taylor. Between 2006 and 2009, Ms. Taylor was also at Omnicom media in L.A. as exec VP and managing partner at PHD.

Individuals and companies mentioned in this story either declined to comment or couldn't be reached.

It's not clear that Disney was dissatisfied with 4D. If it had been, it probably wouldn't have tried to bring the entire team, including the account chief, to the new shop. And a holding company doesn't typically let a rival take its people and business without making a fuss.

For now, both holding companies are relatively quiet and the timing couldn't be better for Omnicom. Publicis isn't likely to make a legal issues about losing its people or one of its largest accounts since it's slated to merge with Omnicom in 2014.

Under normal circumstances, however, holding companies often take legal action when their employees leave and try to take business with them. "If the optics appeared as though some employees were attempting to move an account to another agency, then I'd expect that the agency would feel compelled to take action," said Rick Kurnit, a partner at Frankfurt Kurnit Klein & Selz. "If optics are that employees had nothing to do with it then I wouldn't expect the agency to do it."

In some scenarios, however, incumbent agencies are better off agreeing to the brand's terms, such as agreeing to give up all its people, so they can collect a termination fee or not have to pay severance to employees that had serviced the account, he said.

It's unclear which holding company's media group will be the dominant brand, if there is one, in the new Publicis Omnicom Group. But they're nearly neck-and-neck when it comes to revenue, so perhaps there's some pre-merger competition at play. In 2012 Omnicom Media Group's global revenue totaled $1.93 billion and Publicis's two key global media units notched $2.01 billion, a figure that doesn't include additional media-related revenue at various holdings that aren't part of those two units, according to Ad Age DataCenter.

While Omnicom is unlikely to deal with any pushback from Publicis, it will have to navigate its Warner Bros. conflict at Omnicom Media Group, the network that houses both PHD and OMD. In 2011 Warner Bros. shifted its business to OMG from WPP's Mediacom without a review. "Warner Bros. media business continues to be serviced by its own standalone Omnicom Media Group unit known as WB@OMG," OMG CEO Daryl Simm told Ad Age.

Starcom continues to support Disney's ABC brand, and Carat handles its parks and resorts.

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