Has Rebundling Begun, Or Did The Interpublic Guys Just Blink?

Was Wednesday's restructuring of Interpublic's media operations what some have predicted as an inevitable "rebundling" of media and creative services, or did Interpublic simply fail in an attempt to emulate the organizational structures of rivals like WPP's GroupM, the Omnicom Media Group and Publicis Groupe Media? That's the multibillion-dollar question circulating around Madison Avenue following the holding company's announcement that it is folding its 17-month-old Interpublic Media unit, and will begin to centralize some of its media shops under the umbrella of its full-service agencies.

Initiative becomes part of DraftFCB Group, a recently combined company itself, and Universal McCann will formally be part of the McCann Worldgroup, although both media units will retain separate P&Ls.

The third side of the Interpublic Media triangle--aggregated negotiation unit Magna--will continue serving Interpublic, UM and other small IPG media companies.

"This further confirms that media is now perceived as the other creative department," says Leslie Winthrop of AAR Partners, a search consultancy specializing in media services. "This is both bundling and unbundling: Planning will move back toward creative, but [negotiating and buying] will stay separate. Magna will still carry the clout."

Interpublic Chairman and CEO Michael Roth said in a statement that by bringing strategic media thinking closer to the creative shops, IPG's new model puts the company at the forefront of industry trends--ones that prove consumer and brand engagement are just as essential as scale and leverage.

"If this move helps stimulate collaboration, then that's a good thing," says Arthur Anderson, co-founder of Morgan Anderson Consulting. "I also wonder whether bringing these [units] closer together might well make for less need for account management, in which case I applaud this."

In place of Interpublic Media, IPG has formed the Interpublic Media Council, made up of senior operating units and corporate executives, which will oversee all IPG's media companies' operations and direction.

The council will be chaired by Philippe Krakowsky, IPG's executive vice president for strategy and corporate relations, and includes: Initiative global CEO Alec Gerster; McCann Worldgroup chairman John Dooner; UM global CEO Nick Brien; and Steve Gatfield, IPG executive vice president, strategy and network operations. The sixth member is former Magna chairman Bill Cella, who will continue to oversee its operations, but as DraftFCB's vice chairman. Cella will report to DraftFCB's COO Laurence Boschetto.

Also under the watch of the Interpublic Media Council is a new unit called the Futures Marketing Group, which will develop new business models and manage IPG's digital and new-media investments, like its recent partnership with Facebook.

"I suspect some of [this decision] is being forced by the new media, where creative is essential to the media buy. So much of it is still free form, not your typical :30 or [four-color magazine ad page] placement," says long-time media industry observer Erwin Ephron.

One of the potential pitfalls for the new entity is its reporting structure, or lack thereof. Although Initiative is now a part of DraftFCB, and UM is part of McCann, all four company heads retain their executive autonomy.

"If I were a pessimist, I would point out that this could be like putting four big dogs in a room without a muzzle," Anderson notes. "But I'm usually an optimist, so let's say that this will ultimately work out to serve the client better."

Perhaps appropriately, Interpublic Media will be phased out through the rest of this month, and exit by Halloween. Most Interpublic Media employees will be absorbed into other IPG units, although a few will leave, the holding company said in a statement.

Next story loading loading..