Publicis hashes out fate of D'Arcy clients

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As 120 executives from Publicis Groupe networks converge on Paris for an all-day conclave Oct. 24, Chairman-CEO Maurice Levy is steam-rolling the dissolution of D'Arcy Masius Benton & Bowles and trying to lock in D'Arcy's $10.5 billion in worldwide billings at his other three global networks.

He is also trying to cement revised roles for two D'Arcy executives, Lee Garfinkel and John Farrell, who have yet to accept offers for new assignments.

"More than 80% of [D'Arcy's] revenue will be solved within two weeks," said Mr. Levy, who added that he expects "zero" client losses.

Mr. Levy is already arranging mergers between D'Arcy and Leo Burnett Worldwide agencies on a country-by-country basis, even though a number of D'Arcy shops from Korea to Russia have shown signs of balking.

Publicis Worldwide is likely to emerge newly empowered as Mr. Levy shifts top D'Arcy executives to Publicis and tries to anoint Publicis as a Procter & Gamble Co. agency. Mr. Levy himself, in addition to his holding-company role, keeps the titles of Chairman-CEO at the Publicis agency network he created.

P&G`s Global Marketing Officer Jim Stengel said he is very happy with the work of Lee Garfinkel, D'Arcy's president-chief creative officer, signaling that some P&G accounts could move to Publicis if Mr. Garfinkel accepts the post there of worldwide creative director, reporting directly to Mr. Levy.

"We are in discussions now," Mr. Garfinkel confirmed.

There are also questions about whether John Farrell will stick around. D'Arcy's president-CEO has been offered the same title at Publicis Groupe's Specialized Agencies and Marketing Services, but those agencies are lobbying to be grouped under the agency brands instead.

big cuts

By yearend, scores of Publicis Groupe employees-mostly back-office posts and D'Arcy orphans-are expected to be cut, and up to 20% of former Bcom3 agency employees could be gone within a year, said senior executives. Those decisions are closely guarded due to Mr. Levy's concerns about Wall Street drawing parallels to the bloodbath that followed WPP Group's acquisition of Young & Rubicam.

In one of the first mergers, D'Arcy's U.K. Managing Director Barry Cook will be chairman of a combined D'Arcy and Burnett agency in London. In Japan, the Beacon agency already combines D'Arcy, Burnett, a Dentsu unit and Saatchi.

"We are pragmatic," Mr. Levy said. "I would like to strengthen the Leo Burnett network in Europe, and Publicis in Latin America and Asia. If we need some stand-alone operations, we'll live with that."

There are problem countries. In South Korea, Seoul D'Arcy is 60% owned by the family-run Namyang dairy company. Local agency executives said Seoul D'Arcy is more likely to look for another foreign partner than to merge with a Publicis agency. Last week, managers at D'Arcy's Russian agency defected with several big clients and re-opened under the name Rodnaya Rech.

Despite frantic activity to place clients, few other accounts have been publicly resolved.

"It's like the war room of a bad Peter Sellers movie," said a new-business executive at a non-Publicis shop.

In the U.S., D'Arcy and Burnett's General Motors Corp. business will move to a new global Burnett unit. Ernst & Young and Capital One are likely to follow D'Arcy's Susan Giannino, now Publicis Worldwide USA's new chairman-CEO. Philips Medical, a unit of Philips Electronics North America, settled on keeping its account under the Masius brand.

Terry Fassburg, VP-brand communications, Philips Electronics, said it is "premature" to say where within Publicis its other businesses will go.

Commenting on Mr. Levy's rapid pace of change, one senior agency executive said, "Maurice has done in weeks what Roger Haupt couldn't do [with Bcom3] in years."

-with staff contribution

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