IPG: No, We're Not Rebundling, We're Aligning

Yet Media Units Look to Be Moving Back to Ad Shops in Latest Revamp

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NEW YORK (AdAge.com) -- Here's an idea: Perhaps media agencies and ad agencies should be bundled together.
Interpublic: 'aligning' not 'rebundling'?
Interpublic: 'aligning' not 'rebundling'?

That old chestnut? Yes, and you can blame Interpublic for reopening the rebundling debate, one of the industry's longest-running and most fiercely fought. The holding company last week disbanded its expensive and ineffectual IPG Media unit, and re-organized in a fashion that looks a lot like it's moving its media units back into its ad agency networks. The IPG Media umbrella, created nearly two years ago to oversee the holding company's various media assets, will be replaced by a structure that "aligns," in Interpublic-speak, its two media agencies, Initiative and Universal McCann, with its two creative networks, DraftFCB and McCann Worldgroup.

Of course, rivals carped that Universal McCann never really left the McCann Erickson fold, prompting the question of how it could really be rebundled. Even Interpublic, in using that "alignment" phrase, clearly was distinguishing between a full reintegration of the ad and media shops and what it has done, which is to move the two types of shops into proximity to ensure they work more closely by using communications planning to intertwine media and creative. Get it?

Plenty of questions
If not, you're not alone. Interpublic management offered few details about the new arrangement. And with no concrete example of how the collaboration will be achieved or what it will produce, Interpublic left rivals with plenty of questions.

"The DraftFCB-Initiative idea ... does potentially create a differentiated offering," said Charles Courtier, global CEO, Mediaedge:cia. "The thing is, they're saying they're also available for independent business. Are they one thing or the other?"

Interpublic is also leaving open to interpretation the future of IPG Media CEO Mark Rosenthal; the company hasn't said he's leaving, but the executive said he's "looking forward to the next stage in his career."

The changes will be felt less at Universal McCann -- which was launched in 1999 by separating out media buying and planning for accounts handled at sibling McCann Erickson -- than at Initiative and DraftFCB. Yet while the media and creative networks will collaborate more closely, they will continue to exist as independent entities, each with its own profit and loss. It seems Interpublic is looking to have it both ways -- a common strategy in the agency world, and not necessarily a bad one. "Both networks feel that there's a potential to create solutions for clients beyond what either would create on their own," said Initiative CEO Alec Gerster.

Converging businesses
"Media is a specialist business, and it is also a business that is converging with the content and creativity space," said Steve Gatfield, Interpublic's exec VP-strategy and network operations. "For that reason, it is pointless to hold dear to the old model, where media and creative were separate."

"The restructure does allow those agencies to connect back into the marketplace as brands that can go in and tell advertisers they offer full-service solutions," said one media seller. "That's a point of difference for them -- and that's a good thing."

Ed Erhardt, president, ESPN and ABC Sports, said he supports "anything that improves cross-media communications in an integrated way."

Some praised Interpublic Chairman-CEO Michael Roth for shuttering the failing unit fairly quickly. "He made a bad decision [forming IPG Media]," said one industry observer. "He didn't wait two years before taking action."

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Brooke Capps contributed to this report.
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