Alexandre Gama central to deal, as BBH sells 51% stake to Publicis Groupe

July 5, 2012

The other shoe has dropped. Not only has Publicis Groupe bought up Neogama BBH (see my post of yesterday), it has also taken the opportunity to acquire the 51% stake in BBH it did not already own. As will be seen, the two acquisitions are intimately related.

By any standards, this is a historic moment for all concerned. The old guard at one of Britain’s most illustrious agencies is moving aside after 30 years to make way for new management.

Down step the two surviving partners, group chairman Nigel Bogle (pictured) and worldwide chief creative officer Sir John Hegarty – both legends in their own lifetimes. Up step Simon Sherwood to Bogle’s position (he is currently group CEO), Gwyn Jones to Sherwood’s role and Neil Munn, CEO of BBH’s branding specialist Zig Zag, to an additional group chief operating role.

But here’s the clever bit. Neogama founding partner and chief shareholder Alexandre Gama is taking on Hegarty’s mantle as worldwide chief creative officer.

This too is highly symbolic. In seeking a successor to Hegarty, BBH and its paymaster PG have cast their net wide and picked someone quintessentially representative of the new wave of creativity coming out of emerging markets. The centre of gravity – they are saying in so many words – has changed, from Britain to Brazil, and countries like it.

The change from first generation agency to second generation management is always accompanied by high risk, no matter how successful that agency. Remember Collett Dickenson Pearce anyone?

But this deal has been carefully crafted to hedge, as best anyone can, against such a risk. The rounded symbolism of 30 years clearly suggests Bogle and Hegarty have long mulled their departure at this point. No one can accuse them of failing to bring on the next generation of management.

The Gama move is, however, a genuine surprise and must have been opportunistically fashioned out of Gama’s decision to sell his stake last year. Clever old Gama for parlaying his position so well. But a hat tip to Publicis group chief Maurice Lévy as well for crafting such an imaginative solution.

Now all they need to do is sort out the Unilever problem.


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.


The end of a riveting tale – BBH resigns Levi’s account

July 15, 2010

It’s probably entirely coincidental that BBH’s resignation of the Levi’s account, which the agency serviced with distinction for 28 years, surfaced about the same time as the jeans manufacturer’s second quarter financial results. A constructive coincidence, all the same. If not exactly dire, the results graphically illustrate how far down in the world the Levi’s brand has come: the company compounded a multi-million dollar loss.

In its day – 15 to 20 years ago – Levi’s was a sobriquet for jeans, at a time when everyone of consequence thought it cool to wear jeans. Now they don’t. Or if they do, it’s 7 For All Mankind for upmarket, Gap for downmarket and Diesel for youff – with Levi’s perched somewhere uncomfortably in between. The market for nostalgic Americana has vanished, probably for ever.

Levi’s iconic status arose, in business terms, out of a structural imbalance. The company’s own retail presence was extremely weak outside the USA – even today it does not own all its outlets, leading to an impression of inconsistency. Advertising supplied the deficit, literally driving people into the shops to buy the stuff. That’s a relatively unusual situation in the rag trade; even more unusual is the idea of trusting the agency’s judgement in these matters. But Levi’s did, with astonishingly productive consequences.

You can view BBH’s contribution as a number of discrete, highly visual campaigns – from Launderette, Swimmer through to the Flat Eric vehicle and beyond. Everyone has their favourite. The magical insight, however, was not so much what they looked like, but what they sounded like. The estates of, among others, Marvyn Gaye, Eddie Cochrane, Sam Cooke and Dinah Washington (Mad About the Boy) have every reason to be grateful to BBH. A few years later, in the mid-nineties, the agency moved on from resurrecting the fortunes of dead artists to making the fortunes of new ones, such as Babylon Zoo in “Spaceman”  and Mr Oizo in “Flat Beat”.

Latterly, however, Levi’s seems to have lost faith in advertising and BBH in Levi’s. It’s not just that the jeans brand is becoming more penny-pinching as it tries to cope with commoditisation; BBH has, these past two years, found it a great deal more difficult (I understand) to get its creative proposals accepted. Even so, it must have been with a heavy heart that Nigel Bogle, BBH group chief executive, composed the letter firing one of his original, and signature, clients.


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