Interpublic Group of Cos. is undertaking a reorganization that will see the entire U.S. media department of one of its biggest agencies, DraftFCB, shift to sibling agency Mediabrands.
The move signals a renewed focus on DraftFCB's digital, CRM and creative roots as it seeks a fresh start under a new CEO, who is expected to be installed sometime in the next few months. It could also be seen as an initiative focused on securing the agency's existing business, given DraftFCB has had a rocky few years marked by some major account losses and now wants to regain its footing.
As part of the reorganization, Mediabrands, which is the umbrella company overseeing three Interpublic media shops -- Initiative, UM and the newly formed BPN -- will absorb DraftFCB's media staffers, which number about 50 people domestically. Among them is Chief Media Officer Rich Gagnon.
DraftFCB will also relinquish its various media-planning accounts. That includes work for Merck, Boeing, Dow, Sharpie, Amtrak and the FDA anti-smoking assignment, as well as some Microsoft and PWC project work. The moves aren't expected to result in layoffs.
Of the three media networks, Initiative could benefit the most; it will absorb the biggest of those planning accounts, Merck, since it already handles media buying for the pharma giant out of New York. Initiative is expected to absorb additional accounts from DraftFCB as well in the coming weeks.
"Since the creation of IPG Mediabrands, we've looked to deliver the benefits of media scale and innovation, while also aligning the strengths of our media and creative networks for the benefit of clients," said Interpublic Group of Cos. CEO-chairman Michael Roth in a statement. "This move is an evolution of that strategy, which will allow the insights and expertise that IPG Mediabrands and DraftFCB bring to clients to be combined into an even more integrated set of offerings and capabilities."
Interpublic reps insisted the move isn't part of any larger moves to dismantle or break up the agency, but rather to focus on what it's good at, things like digital marketing and CRM. "IPG continues to invest in the DraftFCB product and we're excited to see the agency move forward," the company said in a statement. DraftFCB is also trying hard to bolster its creative.
The agency recently appointed Javier Campopiano to lead creative director in the New York office. He was most recently regional creative director of DraftFCB Latin America. More broadly, Interpublic has stated it is looking for a new leader at DraftFCB to succeed Laurence Boschetto. At an investor conference in November, Mr. Roth said that Interpublic is committed to finding "a successor for [CEO] Laurence [Boschetto] at DraftFCB and we are in the process of doing that." Mr. Boschetto is still in his role.
One difference, pointed out by an executive familiar with the matter, is that DraftFCB clients tend to be a mix of U.S. and global brands. Mediabrands has already absorbed the majority of DraftFCB's media business outside the U.S., the executive explained, so this move is consistent with the international effort to create greater efficiencies and scale.
This latest change affecting DraftFCB's media department comes just months after the agency lost its Taco Bell media-planning business to Publicis Groupe's Spark, and after losing MillerCoors and a year-and-a-half after losing its 58-year-long client SC Johnson.
According to the Ad Age DataCenter, the agency had $955.4 million in worldwide revenue in 2011, the last full year available. U.S. revenue accounted for $536.7 million, while non-U.S. revenue was $418.8 million. International and U.S. revenue were flat over 2010.
Contributing: Maureen Morrison