This week's reorganization by advertising conglomerate Interpublic Group of Companies Inc. following its $1.8 billion stock-for-stock purchase of True North Communications will put more emphasis on direct marketing efforts.
The reorganization replaces Interpublic's 20 global operating units with four: The Partnership, which is positioned as a global marketing resource; McCann-Erickson WorldGroup; FCB Group; and Advanced Marketing Services.
“I think that the new organization is a response to the rising importance of direct marketing and other marketing services in the overall communications mix,” said Kathryn Woods, formerly at True North and now spokeswoman for Interpublic in New York.
DraftWorldwide now is one of the key agencies in The Partnership. Others in The Partnership are ad agency Lowe Lintas & Partners, media specialist Initiative Media and public relations company Golin/Harris International.
Howard Draft, chairman/CEO of DraftWorldwide, has been named a senior partner overseeing The Partnership, which includes myriad smaller agencies in the Interpublic portfolio.
“Within The Partnership, Draft will be aligned with advertising, principally Lowe Lintas, so they'll have an opportunity to continue to work together to interconnect for clients who want total solutions,” Woods said.
The restructuring is designed to decrease Interpublic's reliance on traditional advertising. Interpublic chairman/CEO John J. Dooner Jr. has been reported as saying he would like marketing communications to account for 60 percent of revenue across the organization in three years.
Promotion, event and direct marketing accounted for 22 percent of Interpublic's $5.63 billion in revenue last year. Public relations accounted for 8 percent, media buying 6 percent and marketing intelligence 11 percent. Advertising accounted for the rest.
After last month's True North acquisition, event and direct marketing will remain at 22 percent, public relations will be 9 percent and marketing intelligence will be 9 percent. Advertising and media buying comprise the rest.
Combined revenue for Interpublic, including the True North numbers, is projected at $7.2 billion this year on a pro forma basis.
The reorganization will not affect MRM Partners Worldwide, however. This direct marketing and customer relationship management agency will continue reporting to McCann-Erickson WorldGroup, working alongside the flagship McCann agency brand and smaller siblings.
The FCB Group will include the acquired True North properties. Foote, Cone & Belding Worldwide will deliver advertising, while FCBi will offer direct and Internet marketing services.
Other direct marketing members of the FCB Group include Analytici for database marketing, The Hacker Group for customer acquisition services, R/GA for Web design and development and Marketing Drive for integrated marketing.
Also, Interpublic's Weber Shandwick Worldwide, strong in technology PR, has been merged with True North's BSMG Worldwide. Labeled Weber Shandwick Worldwide, the merged entity will become the world's No. 1 PR firm with revenue of $500 million.
Interpublic's Advanced Marketing Services division replaces Allied Communications Group. This group includes market researcher NFO WorldGroup, event marketing firm Jack Morton Worldwide and New America Strategies Group for multicultural marketing.