Burnett buys BBH stake in pact shaped to avoid client conflicts

Published on .

Leo Burnett Co. surprised the advertising community by announcing it was acquiring up to a 49% stake in U.K. hot-shop Bartle Bogle Hegarty, London. Since both agencies are private, terms weren't disclosed. Bartle Bogle, the U.K.'s 14th largest agency, had 1996 gross income of $38.9 million and billings of $291.3 million, according to Advertising Age estimates; Burnett is the No. 1 U.S. agency brand, with gross income of $393.7 million and U.S. billings of $2.65 billion.

Executives at Burnett and Bartle Bogle stressed their networks will remain wholly separate. "Each of us has strong and unique corporate cultures, which we are determined to protect," said Burnett Chairman-CEO Rick Fizdale. "For that reason, we will continue to operate independently, except on the media front." Mr. Fizdale said details of the combined media operations were still under discussion but that Bartle Bogle's stand-alone media group, Motive, will continue to handle strategic planning for Bartle Bogle clients while Burnett will carry out buying duties on a market-by-market basis.

Burnett isn't planning to work with Bartle Bogle to pitch new business and Mr. Fizdale said an association on the Levi's brand assignment, the $90 million account Bartle Bogle is pitching, isn't in the cards. Bartle Bogle is still proceeding with its plan to open an office in the U.S.--believed to be slated for New York or San Francisco--and will not work out of any of Burnett's U.S. space.

Mr. Fizdale said the agencies will be so separate--neither will have board members from the other--that there will be no client conflicts. That's despite the fact that Bartle Bogle works for Unilever, Audi and Whitbread Brewing while Burnett has Procter & Gamble Co., General Motors Corp.'s Oldsmobile and media buying for Miller Brewing Co.'s Miller Lite.

The primary benefit Bartle Bogle will bring to Burnett, said Mr. Fizdale, is "access to a revenue stream different from our own" that the agency can use down the line to "invest more heavily in our brand" in areas such as technology, R&D and salaries to attract top-grade personnel.

Bartle Bogle first approached Burnett about an association in 1994, but talks broke down and were reinstigated earlier this year.

Copyright December 1997, Crain Communications Inc.

In this article:
Most Popular