VivaKi at a Crossroads

In the summer of 2008, Publicis Groupe formed VivaKi, a unit designed to be the model for how a hidebound ad holding company can rush headlong into digital media. Now, two years later, VivaKi co-managing partner David Kenny is departing Publicis, a decision he pinned on his inability to relocate to Paris. (He leaves at the end of June.) This comes at a critical time for the organization, which is putting into action the strategy he laid out, while trying to avoid the pitfalls that typically come when a holding company centralizes operations at the risk of impeding on the prerogatives of agency brands.Complicating things further, Kenny -- believed to have been a possible candidate to succeed holding company CEO Maurice Levy -- was a member of Publicis' 12-person management committee, which, when he leaves, will have no one with digital expertise.Kenny's co-managing partner, Starcom MediaVest Group founder Jack Klues, will run the unit himself as CEO. Kenny's mandate was to meld Publicis' digital and media assets in order for it to take advantage of its scale in driving partnerships with media and technology players; centralize research and development; and better manage digital talent. Under the executive, the company complemented its December 2006 $1.3 billion purchase of Digitas, where Kenny was then CEO, with a $530 million purchase of Razorfish in August 2009. It also scooped up search specialist Performics from Google in August 2008. VivaKi has had its share of success. Publicis last week boasted it's well on its way to deriving 23 percent of its revenue through digital, compared to just 6 percent when it bought Digitas. But it has also run into roadblocks in trying to impose a new structure across a 45,000-person company run as a collection of fiefdoms. "I think [Kenny] miscalculated his influence and digital's influence on the company," said a source who asked not to be named.Kenny said he believes VivaKi's strategy is the right one. Its challenges, he noted, have less to do with a fight between digital and media people than with the difficulties associated with globally executing and expanding the strategy, how well internal politics will be navigated and "adequate investment from Paris."For that reason, Curt Hecht, president of VivaKi Nerve Center, the centralized hub for developing company-wide tech platforms, will relocate from Chicago to Paris for a year. It's a move Hecht said would allow him to expand VivaKi initiatives like Audience on Demand to new markets and bring an American view of tech innovation to Publicis management there. While Klues does not have a background in digital, and has told Levy he will retire in 2012, he will be assisted with input from a variety of veteran digital executives in addition to Hecht, Levy said in a recent interview. They include Razorfish CEO Bob Lord, Digitas CEO Laura Lang and VivaKi chief strategy and innovations officer Rishad Tobaccowala. (See also: "Why Levy's Staying On at Publicis.")"In a few months, we'll see who becomes Mr. Digital," Levy had said. "Some people think [Kenny] is the father of digital, but we have had a well thought through strategy for a long time."That strategy is premised on finding the right balance between VivaKi's capabilities and those of the agencies working with clients day in, day out.There are areas where VivaKi, by all accounts, has played a critical role. Within the Nerve Center under the leadership of Hecht, it has built the company a trading desk to bid on emerging ad exchanges like Google's DoubleClick. The Audience on Demand network has run 1,250 campaigns for 55 clients. The Nerve Center has also pioneered advancements in video ad formats through an initiative called The Pool. This type of work is best done on a holding company level, according to Hecht, because it adds value to Publicis agencies without encroaching on their differentiation in the market. Audience on Demand, which requires vast amounts of data and partnerships with tech providers like Invite Media and MediaMath, makes sense on the holding company level. So, too, do partnerships with Microsoft and Google. Other initiatives have encroached on agency turf or simply fizzled, and some digital agencies have questions about internal tools they've developed moving into VivaKi as they can be key differentiators in the market. Razorfish, for instance, developed the Edge marketing dashboard that was moved into VivaKi. There is now debate over moving Razorfish's internally developed Social Influence Marketing score methodology to VivaKi. In addition, Razorfish's top social media executive, Shiv Singh, is likely to move to a VivaKi role, depriving Razorfish of high-profile talent in a fast-growing area of importance to clients. Other moves have required agency adoption in a structure where the agency leaders do not report through VivaKi. In December 2008, for example, VivaKi unveiled the REAL (Reach, Engage, Amplify and Listen) suite for social media.The idea was to vet the dozens of social media vendors for a preferred list of providers for activities like building Facebook apps or measuring online buzz. It never took off because Publicis agencies didn't follow along. In fact, the day it was announced, the head of one agency said it would continue using whatever provider brand teams felt was appropriate. According to one vendor chosen for REAL, the designation never helped in getting business because decisions were still made agency by agency. Kenny, who spent a decade as a management consultant before running Digitas, readily admits to receiving some internal flak for his vision of what VivaKi can accomplish, something he chalks up to resistance to change within large organizations. "Of course there was a conflict," he said. "There was a new idea and people don't like to cede control."

Performance Marketing

VivaKi at a Crossroads

Brian Morrissey

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Brian Morrissey