Spins Off 2 Units, Expected to Ditch or Alter ‘Mini-Agency’ Setup
CHICAGO–Change is again afoot at Leo Burnett, faulted in the past for not keeping up with the times.
The agency last week announced two spinoffs intended to extend its reach into segmented markets, and is expected next month to announce a reorganization that would dismantle or dramatically alter its ballyhooed “mini-agency” setup.
The shape the new organization will take remains unclear. Possibilities include cutting the number of mini-agencies from the current seven, or firming up a holding company concept under which Burnett’s various entities would operate, sources said. The mini-agencies were created in 1997, each with their own managing director, managing creative director and managing planning director.
Burnett is also expected this fall to finalize a long-anticipated deal with Dentsu giving the Japanese agency minority ownership, sources said.
Officials at Burnett declined to comment on either the reorganization or the Dentsu deal.
Last week, the Chicago agency spun off its Hispanic division, renaming it Lapiz, the Spanish word for pencil. “I like to think of this as an idea whose time has come,” said Lapiz president Dolores Kunda.
Lapiz starts with more than $100 million in existing billings from Burnett clients including Procter & Gamble, Kellogg and Coca-Cola, and recently added Hispanic marketing for Sara Lee’s Ballpark Franks. The shop is among the three largest Hispanic agencies in the country, Burnett officials said.
Also, Burnett media subsidiary Starcom Worldwide has set up a media management unit to service small-to-midsized agencies. The unit, dubbed StarLink, is modeled after the Western International entity from decades ago, said Jack Klues, Starcom’s chief executive officer.
“We work in an industry that is identifying itself as a specialized concern,” he said.
Bob Kubis, formerly a group account director with Foote, Cone & Belding in Chicago, will lead
StarLink and report to Kathy Ring, Starcom’s chief marketing officer.