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Last top 10 Brazilian indie Neogama sells out to Publicis Groupe, not BBH

July 4, 2012

It seems that months-long negotiations over who will own the controlling stake in fashionable Brazilian agency Neogama BBH (see my earlier post here) are now completed. So says the Brazilian trade press.

And the answer, shortly to be announced on the French Bourse, is: Publicis Groupe. Not BBH.

Do such technicalities matter, given that all these agencies are part of the same, happy, family? Well, yes they do. There’s more for micro-network BBH in this award-winning agency than a 35% stake.

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

As is well known, Publicis Groupe is essentially Procter & Gamble-aligned. The only reason BBH, and therefore Neogama BBH, is permitted to handle Unilever business is a ring-fencing 51% stake in BBH held by its senior staff, chiefly group chairman Nigel Bogle.

If Publicis Groupe has directly bought out Neogama BBH, which it appears to have done, what will happen to that sizeable chunk of Unilever business? That is the question – as posed by rival Unilever agencies WPP, Interpublic and Omnicom.

Neogama’s principal shareholder is its flamboyant founder, Alexandre Gama. His is the only top-ten agency Brazilian agency that, up to now, has managed to remain independent. His motives for selling out? He has been running his agency a long time – over 12 years. Bradesco is overweight as the main client. And money, yes money. Gama’s services are highly in demand, and he knows it. He has been hawking his stake about for some time – in the not unreasonable expectation that he will get a bigger wedge from PG if he does so.

Ideally, BBH should have been the one to buy him out. But it doesn’t have the money. So Publicis Groupe, which probably had first refusal anyway, stepped in and snapped up the agency. Gama will now have to report directly to PG group chief executive Maurice Lévy, which he will not enjoy very much. By all accounts, the two men loathe each other.

Even when the Neogama acquisition is completed, WPP – owner of Y&R, JWT and Ogilvy – will continue to be the biggest biller in Brazil.

Neogama’s $667m turnover in 2011 was up 5% on the previous year, according to Inter-Media Project. Its revenue was $53m. It has 270 staff, according to Publicis Groupe.

UPDATE 9/7/12: Some further facts and figures about Neogama’s performance have come my way. Almost certainly included in the deal were two Neogama subsidiaries, Triacom – a promotion company – and MIM – a digital specialist. BBH’s precise share in Neogama was 34.4%. It had no share in Triacom or MIM. The latest financial performance figures were:

Gross revenue, for Neogama, Triacom and MIM respectively:  $66.7m, $8.7m and $1.1m. Net revenue: $57.3m, $7.9m and $0.9m. Operating profit: $28.4m, $1.5m and $0.4m. Operating profit after tax: $18.1m, $06m  and $0.3m.

A rumour has surfaced that Neogama’s biggest client, Bradesco, is reviewing.

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Print and posters more persuasive than film at Epica 2011 creative advertising awards

January 7, 2012

Creative advertising award schemes are, by their nature, an imperfect guide to reality. If your agency doesn’t enter, your work doesn’t get considered; on the other hand, those who do enter and win may be regarded as unrepresentative of general industry opinion.

Even so, hardy annual schemes provide a rough and ready guide to agencies and agency groups that are performing above standard.

Which is exactly what you find with the latest Epica international advertising awards. Set up in 1987, they are Euro-centric or rather EMEA in their scope and differ from most in the genre in being assessed by senior advertising trade-magazine journalists (usually editors) rather than the creative community. Creatives may dislike their work being prodded and probed by what they probably regard as a bunch of philistines, but they cannot deny that experienced journalists bring a degree of objectivity to the proceedings.

So what does Epica 2011 tells us? First that Germany, not France or Britain, is the advertising power-house of Europe. To be sure you would expect the biggest country – and the only one with a thriving economy right now – to be the most prolific entrant. But it also hauled the most winners: 15 golds, 45 silvers, 29 bronze – 89 awards in total. By way of perspective, France came second with 66 awards, of which 11 were golds; and Britain trailed Sweden in fourth place with 41 awards (Sweden: 58), of which 12 were gold (Sweden: 8). Germany had an “off-year” last time round, in 4th place. But pole position is no fluke: it has taken the palm 7 times in the last decade.

Next, the best performing networks. This was less clear-cut than last year, when WPP-owned Y&R attained an easy ascendancy with 8 category winners sourced by 4 different shops. It managed to cling on to top position this year but with a lesser margin – 5 winners from 2 shops – and also faces a serious challenge from Wieden & Kennedy, which shares the top honours. Next ranking were IPG-owned McCann Erickson (4 winners in 4 offices), Omnicom-owned BBDO (which is clearly slipping, 4 winners in 3 offices) and WPP-owned Ogilvy (the same). DDB (Omnicom) came sixth.

Individually, Serviceplan Gruppe Munich, Fred & Farid Paris and W&K Amsterdam took the most golds (4 apiece); and Forsmann & Bodenfors, Gothenburg the most awards (18).

So much for the statistics, but what of the overall quality of the work? A bit of a curate’s egg this year. Film, which is generally regarded as the most prestigious of the 4 leading Epica d’Or awards, finally went to W&K Amsterdam’s ‘Open Your World’ campaign for Heineken. In effect, W&K was in a duel with itself for the top honours, since the other serious contender was its last year Cannes winner – ‘Write the Future’ for Nike. Neither exactly resonates as an imaginative choice – although what they lack in originality they certainly compensate for in verve and exceptional production values. Of the two, Heineken has to have been the right choice: Nike was sooo dated and yesterday’s choice.

But if film failed to sparkle, there was ample refreshment elsewhere. Print, a category in decline if ever there was one, gratifyingly produced a triple surprise. The winner, Leo Burnett’s Swiss office Spillmann/Felser/Leo Burnett Zurich, provided some crackling word-play for, of all things, a financial services client, Swiss Life. “Life Turns in a Sentence” plays verbally on life’s vicissitudes with a series of statements that change their meaning 180 degrees in mid-sentence.

Similarly inspiring was Rainey Kelly Campbell Roalfe/Y&R’s “Passport Stamps” work for Land Rover. It had a simple, appealing graphic quality which would have worked equally well in print although in fact it won the Outdoor Epica d’Or.

While we’re there, the fourth of the big prizes, for Interactive, was won by Jung von Matt Stockholm for its “MINI Getaway” campaign.

For more on the winners, click here.


Will Nick Brien succeed in steering McCann off the rocks?

October 13, 2011

McCann WorldGroup is critical to the performance of Interpublic, the world’s fourth largest marketing services group; it provides about one third of its revenues.

Just recently it hasn’t been doing very well, a worrying state of affairs both for IPG shareholders and McCann’s chief executive of about 18 months, Nick Brien.

The fact is, it has not won any major new business under Brien’s stewardship. Worse, it is in deep trouble with two of its core clients, Nestlé and L’Oréal.

Last month, Nestlé expressed the depth of its displeasure by assigning all of McCann’s signature Nescafé business (nearly everything, globally) to rival Publicis Groupe. Reportedly, that’s $25m revenue down the Swanee.

Now comes news that McCann has screwed up its already troubled relationship with beauty house L’Oréal (which, by the way, is about 30% owned by Nestlé).

The Nescafé affair might – might – be written down to bad luck. Clients do move on eventually, even ones like Nestlé that have been with McCann for several decades.

The L’Oréal fiasco (for such it is) can, on the other hand, only be ascribed to McCann’s managerial incompetence. Stay with me, the story’s a bit complicated but bears retailing.

L’Oréal and its Maybelline brand are even bigger business for McCann than Nescafé: together they account for $100m a year IPG revenue, of which 80% comes out of McCann (according to AdWeek).

Historically, the relationship has been somewhat complicated by the fact US creative for Maybelline is handled by another IPG agency, Gotham, although McCann is responsible for adapting and distributing that work throughout the rest of the world.

Thinking, no doubt, that the account could be more efficiently run as a spin-off unit with its own profit and loss account, Brien and his lieutenants have spent the last year, and an enormous amount of money, creating something called Beauty Village.

Beauty Village was set up at the instigation, and with the full collaboration, of Cyril Chapuy – now global brand president of L’Oréal Paris, but formerly in charge of the Maybelline brand.

Client endorsement enough, you would have thought. But apparently not. No one had checked upstairs with the ‘C Suite’ at L’Oréal, with the result that Beauty Village has now had to be razed to the ground, despite all the hullabaloo a couple of months ago attending its launch.

Fairly or not, the buck for this disaster is going to stop with Brien. Already there is innuendo that the former media man has not got the client-handling skills it takes to run an organisation like McCann.

Whether that is actually true I’m not so sure. Media men may be direct rather than placatory by nature, but that has not stopped the likes of Tim Bell and Rick Bendel (formerly COO of Publicis Worldwide, now marketing supremo at Asda) succeeding in more senior roles.

Besides, there may be a silver lining to the cloud now settling over Brien’s head. At first sight the Nestlé and L’Oréal affairs look like unforced errors playing into the hand of Maurice Lévy, head of Publicis Groupe (core clients, both, at Publicis Worldwide). But Lévy has troubles of his own, with the Nestlé relationship at any rate.

For one thing, he has just lost Carter Murray, his key Nestlé point man, to WPP – which poached him as president-CEO of Y&R Advertising North America. Murray managed to raise Nestlé to Publicis’ premier and most profitable client.

For another, Lévy appears to have overplayed his hand by winning the £250m Ferrero European media business last month. Yes, it’s only media and, yes, a small part was already handled by PG media arm Zenith Optimedia. But now that Ferrero has upped the ante, Nestlé is feeling distinctly uncomfortable about sharing a media agency with its most deadly European rival.


Epica Awards give boost to France – and WPP

November 29, 2010

This year’s Epica creative advertising awards – the 24th in the series – sprang some interesting surprises. France was the lead country – both in the number of winners and total awards – for the first time since 2004. WPP’s Y&R was deemed the most creative agency group – far outdistancing the usual competition from the Omnicom Group. And one of the top winners was an iPhone app.

As one of the 26 trade journal editors drawn from across Europe to judge these awards (exceptionally, the winners are not decided by a jury of creatives) I can testify that recovery is definitely on its way – entries were up 10% this year to over 3,000. But it’s a patchy recovery. The year that has seen France emerge from a creative wilderness is also the year in which one of its two principal advertising trade magazines, CB News – founded by the legendary Christian Blachas, has gone into administration. Elsewhere, the quality of print work (at least, in my opinion) has improved after a long decline; by contrast this was not a vintage year for the television and cinema commercial.

A sign of the times was the ‘Streetmuseum’ iPhone’s app – devised by Brothers & Sisters for the Museum of London– bagging one of the competition’s top four prizes, the Epica d’Or for interactivity. With a museum as client, it was always likely to be a low-budget affair, but what good use it made of that budget. The app artfully exploits sized-to-fit historic photographs as overlays on present-day Google street-map technology to give a vivid impression of London’s past whenever a visitor looked up a landmark on his iPhone. The app shot up to 19th most popular free download and, so the museum reckons, has trebled the number of its visitors.

In the hotly contested film section (TV and cinema commercials) the winner was the somewhat controversial ‘Dot’ created by Wieden & Kennedy London and Aardman Animations for Nokia N8, a smartphone. As a piece of low-budget film-making it’s masterly and involving. On brief too: Nokia has fallen behind in our perception of a desirable smartphone brand and this film, which uses CellScope technology on a bog-standard phone to achieve a remarkable piece of micro-animation, helps to redress the balance. It is one of a series that highlights Nokia’s technical competence in the smartphone arena. The (admittedly non-creative) question mark is: how much of a media budget was spent on disseminating the message? In other words, how many people have seen it?

Stacked up against ‘Dot’ in the final heat was Fred & Farid’s bizarrely amusing ‘Anytime, Anywhere’ TV and cinema ad for Orangina. A series of animals (from giraffes to bears and gay cougars – my own favourite is the iguana sketch) impersonate the actors in a range of cliched television ads, from floor-cleaner to car polish, breakfast cereal to energy drink and zit-buster. The common factor being Orangina starring as the product in every ad. Cut to bloke watching the ads on television, nuzzling up to a sheep (presumably his wife) on the sofa. Animated hommage to Disney, satire of the advertising industry? Who knows? It could only be French. Try it and see:

In the circumstances, there were other commercials that should have made it to the final cut. For example, Ogilvy’s Dove Manthem (you know the one: sing along to William Tell), which was the winner in the toiletries and healthcare category.

Just as odd was the exclusion of Adam & Eve’s ‘Always a Woman’ ad for John Lewis. It lost out at the category stage to Sapient Nitro’s ‘Sneaker Mastermind’ work for Footlocker. Not itself a great ad, but one not dogged by a plagiarism controversy.

Fred & Farid may have been pipped at the post by ‘Dot’ but they triumphed in the outdoor category with an Epica d’Or for their Wrangler Red work. The ‘animal’ theme (lots of that this year) is not new, but the photographic execution was considered outstanding.

More interesting was the final major category, the print Epica d’Or, where M&C Saatchi’s ‘The Last Place You Want to Go’ ad for Dixons narrowly beat BETC Euro RSCG’s Evian ‘Baby Inside’ work.  Evian has made the baby theme something of a trademark these past ten years, each year developing it in a new and interesting direction. This year the image was of adults with the bodies of babies superimposed on their white t-shirts: simple and effective.

But not as startlingly unusual as the Dixons ads, which appealed to the head as much as the heart. It’s good to see outstanding retail print work, full stop; but even better when it employs witty, old-fashioned long-copy which makes elegant fun of the retailer’s rivals. In the eternal struggle for mastery between copy and image, copy definitely won out this year.

So much for the work, but what of the winning countries and agencies? It was noticeable that while France was easily ahead in all winning categories – winners, silver, bronze and total awards – Britain managed to nail three of the four Epica d’Ors (film, interactive and print). It came third overall, but behind France (a long way behind) in the categories winners’ league. Sweden was number two overall, with Germany in fourth place. Far down the league table was the usually feistier Spain.

The top agency was Sweden’s Forsman & Bodenfors, Gothenburg, with 15 awards in total, four of them category winners. Serviceplan Gruppe, Munich & Hamburg – a previous winner – came second. The more important insight to emerge, however, was Y&R’s easy dominance as top network. It had 8 winners across four offices, compared with next-placed DDB’s 4 winners across the same number. Ogilvy came third with four across three. BBDO (like DDB, owned by Omnicom), often an overall winner, has drifted well down the table  (3 over 2).

Taken at face value, that’s something of a pat on the back for WPP creative supremo John O’Keeffe, whose avowed aim is to displace Omnicom as creative top dog. O’Keeffe has his eye on the Cannes Awards, but Epica winners have often proved a useful harbinger.


Lévy makes waves in Brazil, but who’s making the profit?

August 26, 2010

“We believe this will be the decade of Latin America, driven by the Olympics and the World Cup.” Who’s this speaking? In fact, WPP chief Sir Martin Sorrell, referring specifically to one of his favourite BRIC markets; but it might just as well have been his indefatigable rival, Publicis Groupe ceo Maurice Lévy, who has been hoovering up Brazilian advertising agencies as if there’s no tomorrow.

He recently bought a smallish, but trendy, digital agency AG2 , which has been stitched onto Publicis Modem. His latest headline-grabber is a bid for Talent, a privately-owned creative agency that counts Sony, Timberland and Santander among its clients.

According to the Financial Times, which broke the story today, a successfully concluded deal will give Talent a sky-high valuation of $200m (it employs about 200 people), making selling out to the big networks a highly attractive option for other independent São Paulo agencies.

One of Lévy’s gifts as a dealmaker is his ability to seduce his acquisitions into the group as “partners”, leaving them a strong independent identity less liable to defection once the earnouts are paid. The stake in BBH, still 49%, is the most notorious example. With AG2, he has been careful to remodel the network name as AG2 Publicis Modem, in Brazil. At least for now.

The thinking behind the Talent deal is no different. I’m told it’s actually a disguised takeover, to spare the acquired agency’s blushes. Publicis will take 49% when the deal is initially concluded, 11% in 6 months and the rump-end 40% in 3 years’ time. Founder Julio Ribeiro plans to stay on, but he’s of Ed Meyer vintage (78 to be precise); and the chief executive is himself 58.

Talent is a decent agency, with post-tax profits of about $15m (swelled by the Santander account) on revenues of about $50m. But the deal – though a good headline-catcher – is not game-changing for Publicis in Brazil. WPP, which itself showed earlier interest in the agency, is the dominant force. Talent is 15th in the market ranked by billings (according to the latest IBOBE figures, which exclude other marketing services revenue). Publicis’ top Brazilian agency, F/Nazca Saatchi & Saatchi, is ranked 10th, Leo Burnett 13th, Publicis Worldwide 22nd, and Salles Chemistry 33 . But WPP’s Y&R is number one, JWT number 2 and Ogilvy number 3, with Grey trailing at 41. Aggregate score? WPP 1, Publicis (even including Talent) 3.


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