Joint Venture Off to Fast Start

In a meeting with analysts in Paris last Wednesday, Maurice Lévy was able to offer evidence that Publicis Groupe’s young alliance with Japanese giant Dentsu is off to a promising start.

The Publicis CEO told them International Sports and Entertainment, the 5-month-old joint venture between the two, had beat out 21 other agencies to land a plum piece of business from the Fédération Internationale de Football Association for the 2006 FIFA World Cup in Germany. In the sports-marketing arena, iSe, which began operations in April, gained instant stature from the deal. In the soccer-mad world outside the U.S., the World Cup, held every four years, is the global equivalent of the Super Bowl. It will not take place in Europe again until 2026.

“This was a very big win for us,” said George Taylor, iSe’s Dutch-born chief executive. “It puts us in the forefront earlier than even we had expected.”

ISe was given worldwide sales and management duties for corporate-hospitality packages for the 62 games at 12 locations. Taylor would not reveal what the assignment is worth.

Zurich-based iSe enables Dentsu to offer its sports-marketing services worldwide, thanks to Publicis’ global client-service network. (Dentsu has a long-term relationship with FIFA in Asia.) ISe marks Publicis’ first major push into sports marketing.

Dentsu struck its strategic partnership with Publicis a year ago as a result of the French holding company’s acquisition of Bcom3 in September 2002. Dentsu had a 20 percent stake in Bcom3 and after the sale acquired 15 percent of the voting rights in Publicis.

Publicis and Dentsu are already working together on undisclosed projects in Asia. But a Publicis representative denied last week’s reports of plans to start a new joint-venture agency in Asia, a part of the world where Publicis is still not well-represented.

Dentsu, Japan’s largest ad agency—revenue was $2.2 billion in 2002, according to Hoover’s Online—and Publicis, now the world’s fourth-largest marketing-communications group, have sought ways to capitalize on each other’s geographic strengths.

Fumio Oshima, a Dentsu evp, could not be reached, but in a bylined article this month in the inter-national-ist, he wrote: “Reciprocity is an important part of the equation. In return for international assistance, we help our strategic partners in Japan, the world’s second-largest consumer market. We also share our special expertise and experience in disciplines such as sports marketing and content development.”

The alliance has benefited the agencies in other ways. Publicis lobbied one of its clients, Hewlett-Packard, to give its Japanese business to Dentsu, which beat out Hakuhodo for the account; in turn, the Tokyo company helped Publicis win business in France from Dentsu clients Toyota and Canon.

Dentsu dominates the Japanese market with an approximately 25 percent share. It benefits from local practices that allow an ad agency to handle competing marketers under one roof, but the company’s growth is still hampered by a stagnant domestic advertising market.