Bcom3 Group (BDM)

Bcom3 was formed in 1999 by the merger of the Leo Group, Chicago, home of ad network Leo Burnett Worldwide, and the MacManus Group, New York. The third merger partner was the Japanese advertising company Dentsu, which bought a 21% stake in Bcom3. Other major agencies under the holding company's umbrella included the Kaplan Thaler Group, New York, and London-based Bartle Bogle Hegarty, in which Bcom 3 held a 49% stake. In addition to traditional agencies, Bcom3 also housed the international media buying and planning powerhouse Starcom MediaVest Group, with its Starcom and MediaVest domestic units. When it was first formed, the new company was known as BDM, but in March 2000, it was rechristened Bcom3. The "B" in the new moniker stood for "beacon," and the "3" represented the company's three major components: the Leo Group, the MacManus Group and Dentsu. Until 1999, D'Arcy and Burnett were fiercely independent rivals, often competing for the same business. By the time of the merger, they shared several large clients, including Coca-Cola Co., General Motors Corp., Philip Morris Cos. and Procter & Gamble Co. Each agency was a creative powerhouse in its own right, with ad campaigns that included the Marlboro Man, Tony the Tiger and the Maytag Repairman from Burnett and Mr. Whipple, the grocer who implored customers, "Please don't squeeze the Charmin," and "This Bud's for you" for Budweiser beer from D'Arcy. There had been a previous attempt at a merger between Burnett and MacManus, but talks collapsed in late 1998. Leaders of the two networks said at the time that they disagreed fundamentally on how to run a joint media operation. Ironically, when the merger was completed, Starcom MediaVest emerged as a particularly powerful entity. In August 2000, the agency won GM's $2.6 billion account for media buying and planning. That December, Starcom won media duties for the $800 million Kraft Foods account. Despite its strong media operations, Bcom3 relied heavily on traditional advertising. Advertising Age estimated that in 2000 only one-third of Bcom3's revenue came from nonadvertising billings. Following the merger, the traditional advertising agencies' fortunes were mixed. Burnett was awarded the prestigious U.S. Army account, but its debut creative work, which sought to target the Gen X-and-younger crowd with the tagline "An army of one," was poorly received. In early 2001, Burnett laid off about 200 employees or 9% of its work force. When Bcom3 was formed, its leadership announced plans to go public by the end of 2000, but with the stock market weak, the initial public offering was postponed. Continuing economic weakness in 2002 scuttled similar plans for an IPO. By the end of 2000, there was widespread industry speculation that one of the top-three holding companies?Interpublic, Omnicom Group or WPP Group?might make a play to acquire Bcom3, but in March 2002, Bcom3 agreed to be purchased by France's Publicis Groupe for $3 billion. Bcom3 Chairman-CEO Robert A. Haupt became president-chief operating officer of Publicis, and Dentsu, one of the original Bcom3 partners, ended up with a 15% ownership position in Publicis. For 2001, Bcom3 had worldwide gross income of $2.30 billion, up 4.4% over 2000, on billings of $21.99 billion, up 9% over the previous year. It reported 18,634 employees in 243 offices. U.S. gross income for Bcom3 for 2001 was $1.1 billion, up 4.4%, on billings of $10.95 billion, up 8.7% over the previous year. The combined Publicis Groupe/Bcom3 Group ranked No. 4 among the world's top advertising organizations in 2001 numbers. With the 2002 merger, Bcom3 ceased to exist. In a surprising move, D?Arcy, Masius Benton & Bowles was shuttered. Its accounts were switched to other Publicis Groupe networks, Saatchi & Saatchi or Publicis Worldwide.

Bcom3 Group (BDM)

Featured Stories