Philip Morris Could Cause Ethical Problems for Publicis-Omnicom Merger

Smoking and anti-smoking worlds collide

Any industry merger brings with it the potential for client conflicts when agencies work for competing marketers. But the pairing of Publicis Groupe and Omnicom creates a new philosophical wrinkle in that dilemma, beyond rivalries like that between Coca-Cola and Pepsi, which are clients of the agencies. Here, one agency is aggressively telling consumers about the health risks surrounding the other’s brands. Publicis’ Leo Burnett network has a working relationship with Philip Morris dating back to 1954. Omnicom, on the other hand, through agencies like AMV BBDO, Alma DDB and OMD, works on behalf of smoking-cessation products like Nicorette and anti-smoking efforts such as Tobacco Free Florida.

“It’s a fascinating anomaly,” said Pivotal Research Group analyst Brian Wieser. “It’s a new conflict for advertising, an ethical conflict.”

While pictures of Leo Burnett’s namesake founder show him with a cigarette, Omnicom CEO John Wren has been seen in recent years puffing an e-cigarette. Burnett is known for the category’s most memorable work like the creation of the Marlboro Man in the 1950s and Virginia Slims’ “You’ve come a long way, baby” targeting young professional women in the late 1960s. Omnicom agencies—at least in the U.S.—don’t work on tobacco. The last advertising anyone recalls is from BBDO in the 1960s, long before the formation of Omnicom in 1986, for Tareyton, which shows smokers with black eyes who “would rather fight than switch.” (DDB founder Bill Bernbach refused to ever work with tobacco marketers.)

Former execs describe the practice as more of an understood corporate principle than policy imposed from above.

“Omnicom does not have a policy preventing our agencies from working with tobacco companies,” according to a rep. Omnicom did not respond to inquiries about tobacco marketers who, in fact, work with its units.

Top execs at Omnicom agency networks, as well as Burnett, declined to comment. Philip Morris USA has long been the country’s No. 1 tobacco company, and when a spokesperson for the Florida Department of Health was asked about Alma DDB and OMD’s pending ownership by a holding company that derives a large amount of tobacco marketing revenue, she said, “We weren’t aware of the merger, and because of that we’re reviewing this situation. It was a surprise to all of us.” However, later the rep added that Alma DDB is in compliance with its contract, which was renewed prior to the merger, and the state has no contractual relationship with Publicis or Omnicom.

The agencies won the $20 million Florida account in 2010.

Reps for Nicorette, an AMV BBDO global client, did not respond to Adweek inquiries. (Interestingly in 2000, AMV BBDO competed against another Omnicom corporate sibling BMP DDB for the assignment in international markets outside the U.S.) London-based AMV BBDO has also worked for the U.K. government’s Health Education Council’s anti-smoking campaign. A spokesman for Altria Group, parent of Philip Morris USA, had no comment.

Philip Morris has cut back on U.S. ad spending in recent years; in 2012, Philip Morris spent $46 million on measured media, most in support of Marlboro. However, Burnett also works for Philip Morris International, spun off by Altria in 2008, which is still a very large agency client, particularly in Asia and emerging markets.

Philip Morris’ connection to Burnett has been inextricable; the agency was one of the last Chicago office buildings allowed to smoke after the city imposed clear air ordinances. At one point, Philip Morris spent around $680 million with Burnett, which included marketing for nontobacco brands, and the agency had 400 to 500 people working on the client.

Small wonder, then, that a source who spoke with a Burnett exec recently said the agency is a bit nervous given the new Omnicom connection.