afaqs!

Publicis and BBH: No conflicts here

By Biprorshee Das and Anushree Bhattacharyya , afaqs!, Mumbai | In Advertising | July 09, 2012
With the Publicis Groupe announcing the takeover of BBH last week, of all the talks that followed about the development, one wondered if Publicis' relationship with Procter & Gamble and BBH's with Unilever would be telling in any way; experts, though, nix the theory, saying that as long as the management is independent, there should not be any trouble in paradise.

An inevitable marriage, a coming together of strengths, a smart move - call it what you may, Maurice Levy's Publicis Groupe holding a 49 per cent stake in the Bartle Bogle Hegarty (BBH) network for a decade, put its best stride forward in picking up the remaining 51 per cent as well. 'A jewel in Publicis' crown' some called it; a few wondered if the independent creative hotshop will remain so independent after all.

While a lot has been talked about BBH being provided autonomy in its work, some whispers also brought to attention how the takeover has brought two global FMCG giants -- Procter & Gamble (P&G) and Unilever - under one roof, with their existing relationships with Publicis and BBH, respectively.

Ten years back, in 2002, when Publicis Groupe bought stake in BBH for the first time, it drew a lot of flak from P&G and hence the buying of stake was restricted to 49 per cent. The group faced a similar situation in 2005, after its media planning and buying arm ZenithOptimedia won P&G's rival L'Oréal's global planning and buying duties. P&G then pressurised Publicis Groupe to draw a separate strategy for its brands. The reason mainly behind this pressure was that a large part of P&G's media planning and buying out of the UK was handled by Starcom, the sister agency of ZenithOptimedia.

An industry expert on condition of anonymity raises three points.

• How will the group manage conflicting businesses as in this case, we are not referring to any small player but two global FMCG giants, who are very discreet in their approaches?

• Will Publicis Groupe follow the same strategy followed by the WPP Group, which has allowed all its agencies to grow as independent entities that can then manage conflicting businesses?

• With the complete acquisition, the legendary Sir John Hegarty has moved out of his role and the new management has appointed Alexandre Gama as worldwide chief creative officer. This means that his role has diminished in an agency which became popular because of work and his approach towards creative work.

Subhash Kamath

Subhash Kamath, managing partner, BBH India, for starters, stoically affirms, "There is absolutely no conflict."

"Unilever is a large and important client. We handle Unilever. We are independent and will continue to function that way. We have nothing to do with the agencies handling P&G brands. We compete in the market as independent companies," he says.

Not too long ago, Jean-Yves Naouri, chief operating officer and member of the management board, Publicis Groupe and executive chairman, Publicis Worldwide, in a chat with afaqs! explained the philosophy of the Publicis group.

"We have a philosophy called 'Viva La Difference' (or 'long live the difference'). The phrase contains three languages - 'Viva' is Spanish, 'La' is French and 'Difference' is English. It means we understand cultural differences. Not every client wants the same philosophy and vision, and we can offer a variety of diverse agencies to clients," Naouri had then said.

Interesting words, which when applied thought reveals how, with its various agencies, be it Leo Burnett, Saatchi & Saatchi or Publicis, the group has been successful in maintaining and sustaining relationships with its diverse clients, some even being rival brands.

So with its latest acquisition, will feathers continue to not be ruffled, especially when we are talking of two of the biggest advertisers in the world? The key apparently lies in what Kamath said - allowing BBH to function independently.

Jagdip Bakshi

Jagdip Bakshi, global business director on Unilever, JWT, explains. "There are basically two kinds of conflicts - emotional and business. In this case of Publicis Groupe's network agencies managing Procter & Gamble (P&G) brands and BBH handling Unilever's account, if at all a conflict arises due to emotional reasons, it will be based on past history and personal bias, and this might lead to some movement of business. But I believe that all the stakeholders have already discussed the possibilities and there is a bleak chance of any kind of emotional conflict arising."

"The second kind of conflict, which is business in nature, will only occur when an agency starts using the category knowledge it gained from the present business to push a competition brand. However, in such situations, all agencies under a particular group work as independent entities safeguarding the knowledge about their businesses and once again, the chances of conflict are very less," he adds.

The example of the WPP agencies has been cited by many; the fact that the agencies directly compete against each other - one of the favourite cases being how JWT and Ogilvy handle Airtel and Vodafone, respectively, in India.

An ex-Publicis senior hand finds no fault in such an arrangement and even points out how Publicis handles Lakme, a Unilever brand.

"When a brand hires an agency, it needs talent, width and experience. And there are only so many networks to choose from. You cannot sit and wonder if agencies in a network are handling rival businesses. A big brand might not necessarily head to a small independent agency. As long as a firewall is maintained among agencies of a particular network, there is no problem really. Clients have realised that an agency will have a lot to lose if it compromises on that firewall and agencies know too that there is no sense playing dirty," he says.

According to him, the concept of conflicts has long disappeared since consolidation began in the advertising business.

Anil S Nair

Anand Halve

Anil S Nair, chief executive officer and managing partner, Law & Kenneth has a similar opinion as he says that clients do not demand exclusivity to agencies these days at such an extreme level.

"Unilever's relation with BBH is a very strong story as the agency has helped in turning around the game for many of its products in many markets. Similarly, Saatchi & Saatchi and Leo Burnett's relationship with P&G runs for decades. In fact, people managing the brands in the agency would have greater knowledge when compared to a brand manager of the company. The takeover is just about controlling shareholding," Nair says.

He too points out that Publicis Groupe has in the past successfully managed to handle conflicting businesses.

And then again, there is no way that the technicalities could be in any way hidden from either P&G or Unilever and it is highly unlikely that Publicis could have gone ahead with the acquisition if either of the players had raised objections.

Anand Halve, co-founder, chlorophyll, like the rest also thinks conflicts are a thing of the past. According to him though, the problem ahead would only rise if BBH eventually does not turn out to be as profitable an acquisition for Publicis.

"BBH has long been a shining star, an agency everybody lusted after - much like Wieden+Kennedy. Now that you have added a shiny jewel to your necklace, you want to keep it shining. The initial romance in a marriage is always about how well the girl dances; later it is all about how she cooks," quips Halve.

"Networks are also known to be graveyards of great creative work," he warns.

The conflict when it comes to handling two mother of FMCG accounts looks well thought of and taken care of before Levy went ahead with the acquisition. And, if BBH is allowed to function with an independent management, as is expected or rather hoped, hiccups can be averted. Never say never, though!

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