Advertisements
 

Neogama founder and creative chief upsets the BBH applecart by trying to sell his stake

December 19, 2011

There’s an interesting ownership conundrum facing BBH and its 49% sponsor Publicis Groupe. Here is what I have learned.

It concerns Neogama BBH, the global micro-network’s Sao Paulo agency. Its founder, president and chief creative officer Alexandre Gama wants to cash up the majority stake he owns.

Neogama, set up in 1999, is one of Brazil’s top ten agencies and quite a feather in BBH’s cap. It is creatively highly regarded and was the first Brazilian agency to win at Cannes. In fact, if my recollection is correct, it now has at least 18 Lions to its name.

The agency’s biggest single client is burgeoning Brazilian bank Bradesco, but it also plays an important role in servicing BBH global clients such as Unilever and Diageo.

Here’s an example of Neogama’s latest work for Diageo’s Johnnie Walker, which may well be a Cannes prizewinner next year. It was devised by Gama himself:

As you can see, a slick, confident peaen to Brazil, the awakening economic colossus.

BBH, seeking to increase its profile in up-and-coming Latin America, came about its minority Neogama stake in a convoluted way. Back in 2002, Neogama was 40%-owned by Chicago-based holding company BCom3 – the 3 referring to an alliance between Leo Burnett, DMB&B (now deceased) and Dentsu. BCom3 passed on a part of that stake to BBH, in which it by then held a 49%  share through Burnett. Still there? Because it gets even more complicated. Earlier that year along comes Publicis Groupe, which swallows the lot, including Dentsu’s 20% strategic stake, in a $3bn takeover deal, making it the then fourth-largest marketing services group in the world. The important point to note is that PG ended up holding a direct 49% stake in BBH, but only an indirect one through BBH in Neogama. Publicis Groupe CEO Maurice Lévy and Gama are not thought to be best buddies.

Although the subsequent BBH relationship has been mutually beneficial, Gama is known to have been hawking his stake at other agency group doors. Why now? Nine years is a long time to wait for your investment to mature, but some go further in speculating that he is worried about his agency’s dependence on Bradesco as a client.

The sense is that Gama is engaged in an act of brinksmanship with Lévy, which involves using rival groups as a stalking horse. He well knows his own worth: Neogama is far and away PG’s best agency in Brazil (and one of its best in Latin America).

However, buying him out may not prove that easy. If BBH could stump up the cash on its own, that would be the simplest and most elegant solution; but  the likelihood is it cannot. So why doesn’t the parent group just step in and sort it out? Well, PG is not a bank – it will want something in return. Such as buying a majority stake in BBH. The trouble is – PG is also Procter & Gamble’s biggest agency group. BBH is of course a Unilever agency, but the 51% majority stake held by the partners keeps the relationship at arm’s length. Even in this enlightened era of agency conflict management, full ownership of BBH might not go down at all well with the good folk in Cincinnati.

As I say, it’s an interesting dilemma. Let’s see how Gama, Lévy and BBH group chairman Nigel Bogle sort it out.

Advertisements

Baillie and Hatton defection to Ogilvy creates ripples at BBH

October 14, 2009

Baillie/HattonWhat’s really interesting about the appointment of Hugh Baillie as chief executive of Ogilvy Advertising is that he’s part of a breakaway. And the break is away from Bartle Bogle Hegarty.

Former group business director Baillie is being joined by Rachel Hatton as group head of strategic planning, and planning director at the ad agency. Hatton was head of planning at BBH during what may come to be seen as its heyday, when it won all those awards, culminating in the IPA Grand Prix and Agency of the Year title in 2008. Baillie helped to win the global Johnnie Walker business and has led some of the agency’s key accounts, Axe/Lynx, Britvic and Surf among them. Both are BBH stalwarts, Baillie having joined from Saatchi & Saatchi in 1998, and Hatton from Boase Massimi Pollitt (BMP) in 2000.

So, this is a significant coup for Ogilvy and a significant set-back for BBH. Baillie and Hatton come as a team (for example, they both worked on Britvic). It’s a little like that buddy-buddy wrench at DDB London when Paul Hammersley, then ceo, and David Hackworthy, planner, quit to go to The Red Brick Road in 2005.

What makes this worse for BBH is that the defection of senior staff to WPP agencies is becoming a habit. Richard Exon, ceo of RKCR/Y&R, once occupied a similar position to Baillie at BBH. True, he was seduced across at managing director level, and got the top job only after James Murphy set up his own agency, Adam & Eve. But let’s not split hairs. There was also the unfortunate matter of John O’ Keefe, who sat in the BBH creative pantheon only one echelon below Sir John Hegarty. He decided to seek his fortune as global creative director at WPP. Then there’s Guy Murphy, head of global planning, and Russell Ramsey, executive creative director, JWT London. Why has JWT come knocking on BBH’s door? Well, who else’s? BBH is the one to beat in JWT’s competitive creative set, and has the most clients in common (Unilever, Diageo and Vodafone spring to mind). If you can’t beat them, get them to join you, you might say.

Nor is the BBH exodus confined to WPP. Derek Robson quit to go to Goodby, in the USA, as a managing partner; Penny Herriman is managing director and – some would say – soon to be ceo of WCRS; Chris Harris was poached as managing director of Leagas Delaney.

Swallows not making a summer? Well maybe. Any agency which has attained the status of BBH is fair game for the headhunter. In a  sense, it’s a back-handed  compliment that rival agencies feel the need to pillage BBH for top talent.

Nonetheless, another conclusion can also be drawn. And I would be very surprised if this did not condition the thinking of at least some of those senior people who have recently defected. BBH is now 27 years old and in the throes of generational change. It has greatly expanded (into a micro-network) – which in itself offers fresh opportunity for younger talent. And in fairness it has tried hard to bring on a cohort of younger managers – of which London chief executive Gwyn Jones is perhaps the most prominent example. This has not been enough to quell mutinous thoughts in the marzipan layer, a few to the point of defecting. Of course, some of these people may have been talented, but not talented enough. BBH, like everyone else, has had to make some harsh decisions about the size of its workforce, which has been, literally, decimated. One in ten has gone or is going. Nevertheless, I cannot believe that every one of the top-flight defectors has had an assisted exit. After all, it’s also the case that the route upstairs, managerially speaking, is now blocked; and for ambitious people that is a signal to start looking elsewhere.

It is hard to think of BBH without Nigel Bogle, Jim Carroll or Simon Sherwood. On the other hand, if they do not outline their retirement plans in the foreseeable future, the result will be rebellion or atrophy. BBH, at very best, will become less an agency, more a law firm overloaded with “partners”. Not an enticing prospect for the UK’s premier creative shop.


%d bloggers like this: