The restructuring also seems to confirm the dominant role of the TBWA culture following its merger with Chiat/Day last year, prompting questions about whether the agency will scale back Chiat's trademark virtual office, at least in New York.
Account Director Mary Maroun was named to the new post of managing director of the New York office and will share management of the office with Creative Director Marty Cooke.
"It's been an untenable situation between Dick and Ira," said one insider. "This obviously means there will be TBWA-dominated management in New York. It's going to be less virtual."
Reached in Milan last week, Mr. Matathia denied there was any friction with Mr. Costello and said the merged agency remains "as committed to the [virtual office] concept as Jay [Chiat] was."
Mr. Costello said the two executives worked to define separate roles "so we didn't fall over each other. From my perspective, we pretty much had that in order."
TBWA and Chiat's combined New York office will open in about five weeks, adding a second floor to what was Chiat's virtual office in lower Manhattan.
At the least, TBWA executives clearly viewed the new construction as a chance to tinker with the virtual office concept. Mr. Costello said the new floor will include more "surface space," or desks, and more private "project rooms."
"It's really taking the concept and making it more practical," Mr. Costello said.
Messrs. Costello and Matathia denied Chiat's culture has been subsumed by TBWA, pointing out that Mr. Matathia's appointment reflects an added Chiat influence in TBWA's international structure.