NEW YORK Publicis Groupe's decision to acquire Digitas for $1.3 billion is designed to turbocharge the No. 4 holding company's transformation into a player for the digital age.
In a wide-ranging interview with Adweek's Brian Morrissey, Publicis CEO Maurice Lévy and Digitas CEO David Kenny discuss their motivations and how they plan to evolve Paris-based Publicis into a different kind of marketing operation.
Q: How important did you see the need to position Publicis for the shift to digital media?
ML: We decided recently we'd try to become an all-digital company, not only to be able to service our clients on digital and interactive, but also to manage our operations and to give a spirit of being digital to everyone in our organization. We are not yet there, but we made a lot of progress.
Q: What need did Digitas fill?
ML: There's a huge shift in the marketing investment from traditional operations to new approaches [that are] more targeted and most of the time use mobile, interactive and digital communication tools. If we want to be a leader in that field, the only way is to be at the forefront. We had to have a much larger stake of our operation that was in digital. I would like to have much more than the 15 percent we'll have when the acquisition is completed.
Q: How far along do you think you are? Will there be other digital acquisitions?
ML: We are investing a lot in these areas. David Droga is working on a formidable project. We have some other projects [under way]. We are really investing a lot in this new field. You will see not only acquisitions, but also new approaches, new tools, new communication systems. You cannot be a leader if the only thing you do is open your checkbook.
Q: How will Digitas speed this?
ML: The first and most important one is the talent pool. There is only one more thing more difficult than finding creative people—that's to get digital people. They are superb specialists. The have an approach that is second to none. With the combination of that and our client base, we will do a lot of great things.
Q: David, you always said Digitas was better positioned outside of the structures of holding companies that are wedded to traditional media. What changed?
DK: Publicis is not a traditional holding company. Maurice and my new colleagues on [Publicis' management committee] P12 want to be a different kind of company that has more linkages [between traditional and digital]. I don't think it would make sense for Digitas to be connected with any of the other [holding] companies.
Q: Are we at the point where it doesn't make as much sense from the growth perspective to be a standalone?
DK: We were doing fine as a standalone agency. [But] something was going to happen. I would say there was certainly going to be a convergence—but it had to be a convergence to a new model, not a bolt-on to the old model. They're committed to changing the group as a whole. That's the only way it will work. It's unique. I don't know if you'll see it in the other holding companies.
Q: What do you see as the biggest opportunity in being part of a larger structure?
DK: Three things. One is global. We have a lot of global clients, and they're all calling. You can run around and bid against [aQuantive CEO] Brian McAndrews for every little agency around the world, [but] this is a much faster way to get to global scale. In media, we're clearly the biggest customer of Google, MSN and Yahoo. This is a chance for somebody as clear market leader to build standards so it's easier to operate. Thirdly, it's easier for us to build bridges. [Clients] all want a much bigger percentage of their marketing to be digital, but they don't how to get there.
Q: What will this mean for Publicis' clients?
ML: When we will be working on GM or some other clients, we'll have the team together, and we'll take maximum advantage of both [traditional and digital]. We're not at a world that is all digital. We're in a world that is moving progressively to digital—but we have to take into account the old world and to balance correctly the investment. Digitas is changing the way we're looking at things and changing the way clients see us.
Q: David, how do you avoid becoming the interactive agency that matches the suitcases to the plan hatched by the general agency?
DK: That's not Maurice's plan. It's not my plan. And it's not the plan of [Saatchi & Saatchi CEO] Kevin Roberts, [Leo Burnett CEO] Tom Bernardin or [Starcom MediaVest chairman] Jack Klues. We all agree we want the group to be different. At the same time, it's important [for me] to learn and not be the arrogant digital person. I think there's so many great things that happen at the agencies across Publicis. If I approach it with two ears and one mouth, and use them in that proportion, we'll succeed.