DM Agency Draft Gains Upper Hand in Merger With FCB

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Direct marketing agency Draft Inc.'s proposed merger with branding sibling Foote Cone & Belding -- both Interpublic Group of Companies shops -- shows that DM has gained the upper hand in marketing.

This is the first time that a major DM agency has become the bigger partner in an alliance with a branding shop. The combined entity, to be called Draft FCB Group, will have a single management team and P&L.

Even the proposed chairman/CEO for the merged shop is a veteran DMer: Howard Draft, currently boss of Chicago-based Draft Inc. If the merger goes through in the next six to 12 months, FCB global CEO Steve Blamer will leave Interpublic and FCB.

The alliance's stated goal is to offer marketing services with creative designed to generate measurable return on investment, according to Interpublic, New York. It is clear, though, that the merger is in response to increasing advertising demand for accountability and leads from their ads, online or offline.

Interpublic's announcement came less than a week after proposals to separate the holding company's chairman and CEO positions and recoup certain management bonuses were rejected by nine out of 10 shareholders voting. Michael I. Roth is chairman/CEO of Interpublic.

Draft has 40 offices worldwide with 3,000 employees versus FCB's 190 offices and 6,000 staffers.

However, it is widely understood that FCB, also headquartered in Chicago, has had issues competing with other equally illustrious general marketing agencies. To its credit, FCB is strong in emerging markets like India and Brazil.

Draft FCB would offer a complete array of advertising services including branding, creative, database marketing and CRM, interactive marketing, healthcare marketing and retail and sales promotions. Work would run across channels such as television, print and online.

Integration teams are at work to determine where to streamline and where to cut costs across both organizations. Draft New York chief executive Laurence Boschetto and FCB creative boss Jonathan Harris lead the integration committee. Mr. Harris would become worldwide chief creative officer after the merger.

The merger would not affect the independence of separately branded units aligned with Draft or FCB. This includes FCBi, R/GA, Marketing Drive and Zipatoni. Clients of both Draft and FCB will have the option to use the combined shop for all advertising and direct marketing services. They also could stick with services originally sought from the chosen shop.

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