At True North, Bigger Is Better

Client Conflicts Require Retention of Much of Bozell in U.S. CHICAGO--True North Communications, frustrated by failed attempts to form a solid international network through partnership or acquisition, chose to pirate its own second leg in an effort to better cover the globe. By folding Bozell's international business and offices in 52 countries into FCB, the newly combined agency claims it gains $2.3 billion in billings, making it a $8 billion global network. FCB's biggest gain was the DaimlerChrysler account, which bills $700 million in the U.S. alone out of Bozell's office in Detroit. Also being merged into FCB is Bozell's Costa Mesa, Calif., office. The deal was hammered out in the months since David Bell took over as TN's CEO in April, and worked out through a series of meetings by TN's management committee and, just as importantly, during dinners between Leo-Arthur Kelmenson and Brendan Ryan, heads of Bozell and FCB, respectively. Bringing the two disparate cultures of FCB and Bozell together in the U.S. entirely was considered, but ruled out due to client and internal conflicts, Bell said. By leaving much of Bozell's domestic operation alone, most notably its New York headquarters, TN sidestepped many potential conflicts that could have derailed the deal. Ryan was made CEO of the new FCB Worldwide, while Kelmenson takes the chairman's title at FCB. Ryan denied speculation that he has resisted the merger. "I've been wanting it for a year and a half," he said. "It was a strategically balanced decision." Bell's mandate since assuming TN's helm has been to boost the stock by creating a more viable international network. His predecessor, Bruce Mason, formed a disastrous relationship with Publicis S.A. and tried to purchase a third agency network. TN's new setup, Bell said, allows it to focus on one agency's international growth and have another agency for smaller U.S. clients. "Not every client wants the biggest agency in the U.S.," Bell said of Bozell, his former agency. In lauding the new FCB, Ryan said, "A lot of people in business pooh-pooh big. They're just stupid. You've got to be big to be a player in the global arena." That doesn't bode too well for Bozell, which saw its billings shrink considerably with the loss of its Detroit office and DaimlerChrysler to FCB, and its international capabilities eliminated entirely. While several Bozell executives insisted that the agency was not losing anything in the consolidation, one agency insider lamented, "They put us on par with [TN owned] Temerlin McClain, we're so much smaller now." Bozell will be led by Gene Bartley, former head of North American operations. "Every once in a while you have to change your stripes," said Bartley, now Bozell's chairman. He added that the merger will free up Bozell to be more entrepreneurial. Still part of Bozell are its Chicago, Seattle, Omaha, Neb., and Silicon Valley, Calif., offices, and Bozell Kamstra in New York, Boston, Minneapolis, Pittsburgh and Austin, Texas. "It might be better to think of it as Bozell Group," Bartley said. "It actually has very little impact on us," says Tom Bernardin, president of Bozell in New York. "We operate as a separate entity from what they are doing, with the exception of the now strengthened international network." Executives at what overnight became FCB Worldwide in Detroit also shrugged off the shift. "It's another name on the door and a new coffee cup," said Gary Topolewski, chief creative officer at the agency. DaimlerChrysler's move to FCB will have "no impact on people on that account anywhere in the world," Kelmenson said. TN's main hurdle remains solidifying its international network under the FCB name. Strong in Africa but lagging other global networks in Asia Pacific and Europe, FCB's initial overseas focus will be on Europe, Bell said. In charge of that will be Harry Reed, president of international at FCB, and Kelly O'Dea, who comes over from Bozell to head business development overseas. A third FCB president, Ron Bess, runs the Chicago, Southern California and Canada operations. Several overseas car conflicts, specifically Daihatsu in the United Kingdom, have to be dealt with in light of DaimlerChrysler's arrival at FCB. "We'll deal with that accordingly," was all Ryan would say. TN estimated cost savings of $25 million through elimination of duplicate jobs and real estate. Bell declined to give an estimate but acknowledged there would be layoffs. --with Kathleen Sampey Rank/Agency Name 1998 billings (in billions) 1 McCann-Erickson World Group (IPG) 16.4 2 BBDO Worldwide (OMC) 14.7 3 DDB Worldwide Communications Group (OMC) 13.9 4 Young & Rubicam 11.8 5 Ogilvy & Mather Worldwide (WPP) 9.7 6 Euro RSCG Worldwide (Havas) 9.5 7 J. Walter Thompson (WPP) 8.5 8 Ammirati Puris Lintas Worldwide (IPG) 8.4 9 FCB Worldwide (True North) 8.2 10 Bates Worldwide (CCG) 7.7 Source: Adweek Report Cards

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At True North, Bigger Is Better

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Trevor Jensen