Interpublic Eyes Efficiencies Of Initiative, UM -- Taps Nick Brien To Lead Task Force

Interpublic today will make public a plan for improving the operating efficiencies and cross-agency collaboration of its two global media networks - Initiative and Universal McCann - that has already begun ruffling some feathers in some outposts, and is fueling speculation that it will lead to a consolidation of the two brands. That speculation is being driven in part by the fact that Interpublic has tapped Nick Brien, the brash CEO of Universal McCann, to lead the initiative, and to head a task force that will implement changes that are likely to include the consolidation of management functions in at least some offices.

The task force, which will include the senior managers of both Initiative and UM, will hold its first meeting in New York this morning, and will begin planning its first steps. The initial focus is likely to be on how to improve the margins of Interpublic's media operations by consolidating "back office" services, and reduce the common costs associated with procuring outside resources like research and data processing.



The initiative comes a year after Interpublic initiated a new strategy based on the mutual "interdependence" of its media networks and their realignment with their sister brand agencies - Initiative with DraftFCB and UM with McCann Worldgroup - which followed the dissolution of Interpublic Media, an effort to have a holding company-level unit to oversee Interpublic's disparate media operations.

Interpublic executives emphasized that the new initiative does not signal a shift away from the interdependence strategy, though some European trade publications are already speculating on that, but is simply a way to cut inefficiency out of redundant operations that have increased the overhead of the sister media networks, and have created impediments to collaborating on common goals like new business, or the retention of existing clients. The executives said that any cost savings and improved profitability would be reinvested back into the media agencies to improve their capabilities and ability to grow new revenues and profits.

In fact, both Initiative and UM have been improving their revenues and margins throughout 2007, according to statements in Interpublic's quarterly earnings reports this year, and the goal of the new task force is to accelerate those efforts.

While there are likely to be some consolidations in some markets, they are expected to impact offices in smaller markets outside the U.S. Most of the grumbling to date is believed to have come from Interpublic media offices in Asia and Europe.

The plan is not expected to impact any of Interpublic's other independent or shared media operations including joint negotiating and market intelligence unit Magna Global, FCB Media or ID Media.

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