Branding-obsessed Leo Burnett Worldwide yesterday inaugurated iLeo, an independent unit that consolidates the Chicago agency's direct, interactive and database marketing arms in more than 20 global markets.
The action comes the same week that Burnett parent Publicis Groupe SA said it was folding D'Arcy Masius Benton & Bowles, moving that shop's clients and agencies into its Burnett, Saatchi & Saatchi and Publicis Worldwide networks.
“It's really about Leo Burnett committed to an independent network in the direct marketing space, and it's just coincidental in terms of the timing with the D'Arcy decision,” said Peter Steinhauser, a 22-year advertising veteran and newly named president/CEO of iLeo's North American operations.
The Burnett move also comes a week after Paris-based Publicis Groupe closed a $3 billion cash and stock deal to acquire Bcom3 Group Inc., owner of agency brands like Burnett, D'Arcy, Bartle Bogle Hegarty, Manning Selvage & Lee and Starcom MediaVest.
The latest Burnett consolidation under a single iLeo banner will result in the loss of several agency brands.
In North America, for instance, Burnett will combine its chemistri interactive agency with the LB Customer Group, a traditional direct marketing unit.
ILeo's North America arm begins with billings of $25 million out of the worldwide total of $75 million to $85 million. Burnett last year reported agency-wide billings of $9.9 billion.
Overseas, Burnett will fold brands such as Leonardo in Britain and Cartwright Williams in Australia as part of this global streamlining.
“What it allows us is to offer a standardized approach to direct and interactive problems,” Steinhauser said.
Besides Steinhauser, three agency executives have been tapped to head iLeo in their respective regions.
Bant Breen has been named regional director for Europe, Africa and the Middle East. Sumeet Kanwar will become regional director for Southeast Asia, and Giacomo Zandomenego has been tapped as group president of Leo Burnett Latin America. All report to their regional management.
Steinhauser, who has clocked seven years at Burnett, said layoffs are “not expected,” at least in the North American operations of iLeo.
In its new iteration, iLeo will focus on direct marketing acquisition, retention and loyalty. It will offer branded direct response strategy, customer analytics and creative.
ILeo inherits clients like Bank One, General Motors Corp., Walt Disney Co., Hallmark Cards Inc., Procter & Gamble Co., Morgan Stanley, Adidas, the U.S. Army, Kellogg Co., Nestle, Fiat and International Masters Publishers.
The consolidation is almost a grudging acknowledgment for a branding-focused agency like Burnett that direct is growing increasingly indispensable as a marketing tool.
“Ultimately, what clients are looking for is this intersection of strong brands and strong customer relationships,” Steinhauser said. “They're, I believe, different but complementary skill sets and approaches.”