According to executives familiar with the situation, DDB Needham is exploring either a whole or partial purchase of Carlson. But those talks apparently hit snags, and a strategic alliance could be the solution.
Carlson, an estimated $165 million shop, handles the Neutrogena account in the U.S., about $47 million in billings. DDB Needham picked up the Neutrogena skin and haircare products in Europe last fall and added Latin American markets by yearend; that business is still building.
Executives close to J&J said the company, although happy with Carlson's work, recently decided it needed a global agency to coordinate work. That task went to DDB Needham.
DDB Needham approached Carlson Chairman Dick Tarlow and his wife, Sandy Carlson, who is president of the agency bearing her name, about a deal as well as the notion of a strategic partnership.
The Polo/Ralph Lauren account and the designer's licensees are closely tied to Ms. Carlson and represent the agency's largest piece of business, with billings of more than $30 million. Executives said Mr. Lauren isn't amenable to a full sale of the agency.
Without Mr. Lauren's blessing, a strategic partnership is more likely than an acquisition, executives close to the talks said.
"We're just working together to make sure the same image is presented worldwide," Mr. Tarlow said. DDB Needham is "not going to own us."
J&J and DDB Needham executives declined to discuss the situation.
MORE WORK FOR NEEDHAM
DDB Needham also handles J&J's Renova prescription brand and has steadily been gaining additional work from the health-care/toiletries giant. The agency in January was assigned responsibility for a line of Renova-compatible over-the-counter products to carry the Neutrogena name.
Asked at that time if the agency was slated for additional assignments from Neutrogena, a spokeswoman said: "Not at this time."
Mr. Tarlow is not officially on the Neutrogena team, but is said by those who know him to work closely with the business and play a key role in the approval of creative. Carlson is housed in the same building as Revlon-owned Tarlow Advertising, of which he is president.