Commentary

The French Ate DMB&B. Il Est Mort.

I know it’s a mistake to be sentimental in business, but it galls me every time I hear of a great ad agency getting suffocated by a parent company. The latest death in our extended family is D’Arcy, Masius, Benton & Bowles, a once-great institution brought to its knees under its French parent company, Publicis.

The pattern seems to be consistent no matter the agency holding company perpetrating the merger. The big company eats the smaller company, often to prevent losing a major un-losable account that the smaller company just picked up. At first, there are efficiencies realized in the initial digestion of the agency. Some management gets axed, which isn’t always a bad thing. The promise of access to worldwide offices is first dangled in front of incumbent clients, but then slowly withdrawn as the far-flung holding company offices prove much more difficult to work with than was advertised by the parent company.

But what gets excreted out the other end of the parent company seldom resembles what it ate. The indigestion starts with the first downward business cycle. Profits need to be wrung out of the structure, so forward investment is capped and then cut at the smaller agency. It starts to suffocate. New business acquisition becomes a luxury affordable, ironically, only during good times. When business is won, the parent company declines to let the agency hire what it believes is the necessary staff. Client turnover starts to increase in an anaerobic, acidic environment like this. In order to keep business within the parent company system, clients at risk get stripped to other agencies.

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DMB&B, the most alliterative agency name in the business, will be missed. The creator of “This Bud’s for you,” “Melts in your mouth, not in your hands,” and even the archetype of Santa Claus is no more. If ad agencies went to heaven, then, well… never mind, I’m quite sure ad agencies don’t go to heaven.

As a fond alum off Leo Burnett, the most recent and most costly Publicis acquisition, I hope the cadres de puissance learn that local control at even the gross budget level is needed to make an agency last a full century. Leo has been around for more than seven decades, only because its founder had the guts and vision to run deficits and invest in accounts for the long-term when required. I won’t blame Publicis, though, if Leo now founders. I won’t even blame the French. It is the shortsightedness of shareholders that will push a great name like Leo Burnett off the marquis, to clatter down the elevator shaft.

Shareholding is one of the last millennium’s greatest inventions, yet it doesn’t mix well with the mercurial nature of the ad business. If DMB&B had been owned for the past fifteen years by one person, that agency would be alive today. It might be smaller, and it might have had tough times, but it would exist. It wouldn’t lie in the heap, stripped of its clients.

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