Publicis Realigns Digital Resources

NEW YORK Publicis Groupe said it would make Modem Media the digital arm of the Publicis Worldwide network.

As Publicis Modem, the agency will operate side by side with Publicis Dialog, the agency’s direct and interactive marketing services unit. Martin Reidy, president of Modem, will become CEO of both Publicis Modem and Publicis Dialog, where he replaces CEO Colin Hearn, who is leaving the company.

Combined, the two units will have more than 2,000 employees, the holding group said. Reidy reports to Richard Plinder, chief operating officer of Publicis.

In a statement, Reidy said the pairing would offer Modem the opportunity to branch into customer-relationship management and promotions.

“We have a vision for Modem and this takes the agency and our capabilities to the next level very, very quickly,” he said.

“It’s harder to win business when you’re just an isolated player that’s not at global scale,” said Reidy. “We’ve seen that. It was becoming an issue with many of our clients.”

Reidy did not rule out Publicis Modem and Publicis Dialog linking closer, including an outright combination, while noting that Publicis Dialog has a strong presence in many international markets.

The move comes four months after Publicis Groupe purchased Digitas for $1.3 billion. In addition to the agency with the same name, Digitas included Modem Media and Medical Broadcasting Co. Last month, MBC was subsumed into Digitas to create a new health unit.

The holding company released its first-quarter financials earlier today.

Publicis is also carving out some Modem assets for Digitas. Outside of key Modem client HP, which also shares Publicis as an agency, London clients will move to Digitas, which will use the United Kingdom as a base for European expansion. Digitas combined its London operations with Modem in 2005. (Clients now moving to Digitas include Barilla, the BBC, Shell and Vauxhall.

Since the acquisition was sealed, Publicis CEO Maurice Lévy has made clear the Digitas agency was the key to the holding company’s digital plans, particularly in expanding it into new markets abroad. Digitas bought Modem Media for $200 million in July 2004.