'Uncertainty Is Our Nemesis' | Adweek 'Uncertainty Is Our Nemesis' | Adweek
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'Uncertainty Is Our Nemesis'

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NEW YORK -- A week after word surfaced that Publicis Groupe will close down D'Arcy, staffers finally heard word from their superiors. But they learned no details about the fate of agency accounts and employees within the Publicis family.

"Uncertainty is more our nemesis than anything else at the moment," read a memo from worldwide CEO John Farrell, chief creative officer worldwide Lee Garfinkel and chairman, chief branding officer Susan Gianinno. "This is the No. 1 issue we need to focus ... on until every person and every client is settled."

At press time, both Farrell and Garfinkel were still in negotiations with Publicis. Farrell was offered a position as CEO of Specialized Agencies, and Garfinkel the worldwide creative director title for the Publicis network.

Sources said Garfinkel had asked for an "astronomical sum" to take the position. Garfinkel denied this, saying, "It's not just about money. This is a life decision."

One source said most employees are "shocked and disgusted" at Publicis' offers to Farrell and Gianinno, who will replace Bob Bloom as CEO of Publicis USA. (Bloom will move into a consulting role at Publicis.) Many lay blame for this year's Burger King, Pampers and Masterfoods losses (worth about $200 million in total billings) at their door. The mood at New York headquarters was described as "sour" and "low-energy."

"[Shuttering D'Arcy] is not predicated around any failure in D'Arcy," said Farrell. "It's a desire to have three incredibly strong networks and the recognition that D'Arcy has some tremendous client relationships and vision around the world."

Gianinno said, "What people are feeling is more a sense of loss than a clear sense of where they're headed. We're trying to change the mood to a sense of new possibilities and newfound stability. It's the people and clients that make up D'Arcy. Only the name is going away."

Publicis Groupe CEO Maurice Levy said the decision was made because D'Arcy is the holding company's smallest network, is weak in several countries and is in a down cycle in its history. "The agency has suffered some losses that would have made the turnaround more difficult," he said.

Sources said no offers have been made to the second -- tier New York management, including president Lance Smith, general manager Cory Basso and group creative directors Graham Woodall and John Russo. None was available for comment.

While layoffs throughout the D'Arcy network are expected, Levy said they will be "minimal." Levy's goal is for D'Arcy's major clients to move into its other networks -- Saatchi & Saatchi, Leo Burnett and Publicis Worldwide -- and then have key members of the agency teams relocate with their accounts.

D'Arcy Detroit's Pontiac and Cadillac brands will go to a new unit under the Leo Burnett umbrella, according to an internal memo from Bcom3's Roger Haupt. The unit will include Detroit's Patrick Sherwood, president and regional CEO of D'Arcy North America, and creative chief Gary Topolewski [Adweek Online, Oct. 14].

Sources said D'Arcy Los Angeles may be rebranded as Publicis because L.A. is the only major U.S. market without a Publicis presence. A Publicis representative said D'Arcy's 121 offices worldwide are being assessed and that the brand could survive somewhere in the world.

Bloom confirmed that Publicis will get some of D'Arcy's Procter & Gamble business. Levy said a decision on P&G brands will take up to six weeks.

Sources said Saatchi & Saatchi will absorb General Mills' $100 million U.S. business and P&G's $25 million Folger's coffee account.

Ernst & Young chief marketing officer Jim Speros said his account will follow Gianinno to Publicis. A Capitol One rep said its estimated $170 million account and its D'Arcy team will shift to Publicis. Otherwise, executives at Publicis Groupe, its agencies and clients said final decisions are pending.

Several sources said Heineken would follow Garfinkel. A client rep responded that there are "no plans to leave the Publicis fold anytime soon."

Levy said he expects Heineken to land at Publicis in New York along with Garfinkel.

D'Arcy's status in Philips Electronics' corporate branding review and Cadbury chocolates' pan-European review is unclear. A D'Arcy rep declined comment, and the clients could not be reached. Staffers continued work on the pitches, sources said.

D'Arcy's closure left observers dismayed at the loss of another agency brand. "It's sad and not good for the industry when this keeps happening," said Omnicom Group evp Tom Carey, who joined Benton & Bowles in 1967 and left D'Arcy as managing director of New York in 1990. "As these [agencies] evaporate, the identity of the industry as a whole recedes."

Marcio Moreira, chief creative officer at McCann -- Erickson WorldGroup, noted, "Consolidation has created an overabundance of brands, a matrix too complex to manage. It's a high price to pay."

Levy acknowledged that "it would be stupid for my side to consider this brand disappearing as not sad."