Publicis networks switch to client-based accounting

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Publicis Groupe Chairman-CEO Maurice Levy this week outlined a vision that will move the world's fourth-largest holding company to an accounting structure that is centered around each client, as opposed to geography.

"The intent is to have a single [profit and loss] for clients in order that there is not an escalation of margins. Saatchi & Saatchi already has it, and we're hoping to bring it in with Publicis Worldwide. We want to implement it with all clients," Mr. Levy said in an interview last week.

In the next few weeks, John Farrell, president-CEO of Publicis Groupe's Specialized Agencies & Marketing Services-the unit housing the firm's nontraditional advertising companies-is expected to lay out how each firm will be aligned with the company's advertising networks. A senior Publicis executive said that Saatchi & Saatchi is likely to be allowed to pick and choose its partners on a case-by-case basis, while Leo Burnett has expressed interest in partnering with some of the SAMS companies. Publicis Worldwide is already tightly aligned with PR agency Publicis Dialog.

Among the agencies housed in the SAMS division are public relations firms Publicis Dialog, Manning Selvage & Lee and Rowland; direct marketing agencies Aim, Arc and Cartwright Williams Direct; health-care specialists Nelson Communications and Medicus Group; interactive agencies such as Semaphore; and multicultural firms including Burrell Communications Group and Publicis Sanchez & Levitan.

At a time when holding companies are struggling to distinguish individual agency personalities, Mr. Levy said he didn't think the holding-company-as-superagency model worked, so Publicis Groupe is giving its networks a distinct identity. "Each has its own individual character that is not artificial," he said. Mr. Levy described the Leo Burnett network as the agency strongly connected to heartland America brands such as McDonald's Corp. and the U.S. Army, while Saatchi has an edgier British origin and is known as an ideas company. Publicis is differentiated by its French origin and its strong integrated, or "holistic," approach to communications.

Haupt staying put

Separately, Mr. Levy also dismissed rumors of the possible departure of Publicis Groupe Chief Operating Officer Roger Haupt. "He is not using his golden parachute. He is staying, " he said. Mr. Haupt has a 30-day clause in his contract that would give him four times his salary if he were to exercise it. That clause became active this month, following his first six months with the company. Mr. Haupt was previously CEO of Bcom3 Group, which was acquired by Publicis Groupe in September. Mr. Haupt was not available at press time.

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