DigitasLBi Merger Sparks Conflict Between Volvo and GM
Richard Monturo, VP-global marketing at Volvo Car Corp., told Ad Age that combining the two companies means that his digital account, lead by LBi -- which has supported the car brand for several years out of its Gothenberg, Sweden, office -- will bump up against Digitas' work for General Motors. (That includes direct and digital work for Buick and GMC).
While Mr. Monturo has left some of Volvo's work with Havas Digital, he said, Publicis Groupe's LBi has been picking up more assignments over the past 18 months. LBi's duties encompass digital marketing, social media lead, website design and customer-relationship management for Volvo he said.
"Our assignments are competitive with Digitas' GM assignments," said Mr. Monturo, an American marketing exec who's based in Sweden.
What's more, Mr. Monturo said he was stunned to discover the news of the merger via an AdAge.com report early yesterday morning outlining the merger details, including the name of the new agency, DigitasLBi, and the appointment of LBi Chief Executive Luke Taylor to global head of the newly-merged shop.
While the conflict resulting from the merger could prompt a digital review, Mr. Monturo declined to elaborate on his plans for Volvo's digital marketing and whether it would remain with Publicis Groupe. But it's safe to say he was less than pleased to learn of the merger the way he did.
Now it remains to be seen if Publicis Groupe, which did not respond to requests for comment by press time, can make amends and find a compelling reason to persuade Mr. Monturo to not move the Volvo business. But General Motors carries a lot of sway with the agencies it works with, as it's the fourth largest advertiser in the world, with $3.3 billion in ad spending.
The Volvo-GM conflict was not the only potential flash point in the deal announced yesterday. MRY, the youth-marketing agency acquired by LBi in 2011, was left out of the merger and will remain a standalone shop because one of its clients is Visa -- while American Express is a major Digitas account.
At a time when adland is seeing a flurry of consolidation activity, the Volvo example serves as a reminder that the drive for scale and new services can lead to thornier conflict issues. Advertising is still in many ways a relationship business, and as such, even when things are moving fast, full disclosure and communications are paramount to keep in clients' good graces.
It's worth noting that Mr. Monturo is hardly unsympathetic to challenges of the agency business today. Prior to becoming a marketer, he had a lengthy career on the agency side. Most recently, he had served as head of strategic planning at Miami-based La Comunidad -- one of Ad Age's A-List agencies this year -- and before that he worked at TBWA/Chiat/Day, Strawberry Frog and Lowe.