Name change on the cards for MAA Bozell post IPG's global restructuring

By , agencyfaqs! | In | December 31, 2001
MAA Bozell expects some changes in the branding and the structure of the organisation as a result of global restructuring likely to be kicked off by IPG


MAA Bozell in India is waiting for the big news, now that the Interpublic Group of Companies Inc (IPG) has emerged the largest (post its acquisition of rival True North Communications in June this year) among advertising agencies and marketing services companies. Bunty Peerbhoy, chairman, MAA Group Holding Pvt Ltd, told agencyfaqs! he expects some changes in the branding and the structure of the group companies in India as a direct result of global restructuring likely to be kicked off by IPG.

IPG currently includes three major global ad networks, McCann-Erickson Worldwide, The Lowe Group, and Foote Cone & Belding Worldwide, as well as the US agencies like
Bozell, Deutsch, and Temerlin McClain. The group provides a variety of media and business services like marketing, media planning and buying, and public relations through subsidiaries like DraftWorldwide, Initiative Media and Octagon. Interpublic serves some 40 global accounts in 20 countries, including General Motors, Nestlé and Coca-Cola.

IPG, the corporate parent, is based in New York and as is widely known to set companywide financial objectives, strategic direction and global investor relations, besides guiding personnel policy, top management succession and managing mergers and acquisitions. The operating companies are free to focus on their clients' marketing and communications opportunities and on the development of their own talent. The parent company is also not involved with the advertising campaigns or other client-specific marketing programmes, which are planned, developed and executed separately and confidentially within each agency. The group companies are so autonomous that they often compete with each other for business. It is clear that with acquisitions, certain functions may become redundant in the acquired organisations, while some other brand-building assets may be part of its rigorous focus.

So the news for the MAA group in India may not be just in terms of possible account gains and losses because of global realignments but also in terms of which of its agencies need to be merged, which could remain and which has to go. The MAA group has various divisions in its fold, such as Corporate Voice Shandwick (for public relations), MAA Wellness (healthcare communications division), RAMMS (merchandising and retail solutions division), Corvo DraftWorldwide (direct marketing), CIA Optima (media consultancy) and MAA Print and Productions, among others.

The True North Group, which was recently acquired by IPG, had bought out Bozell in 1998. It found then that it had two advertising brands in its fold - FCB and Bozell. It also discovered that Bozell, while large in America, did not have a huge global network. Hence, True North decided to fold Bozell's network into FCB's. So, while it retained the FCB brand globally, it kept the Bozell brand alive only in certain places. India happened to be among the few places where the Bozell brand survived.

Now the question is bound to resurface: What happens to Bozell in India? The group may finally have to take a call as to how many independent brands can be sustained in its fold. "We are just waiting to know what IPG's priorities will be, said Peerbhoy. "We realise that our priorities may not coincide with theirs. For all you know they might just decide to disband the Bozell brand and merge it with FCB. They could restructure the organisation and, as a consequence, we may need to centralise certain functions such as media. Depending on how it (IPG) decides to position itself worldwide, we will know what to do in India."

On being asked if MAA would have to divest its stake to IPG, Peerbhoy said that he did not rule out the possibility and that he was not closed to such discussions provided it helps the clients' interest as well as all the agency's people. Currently, IPG holds only 29
per cent stake (which was with True North prior to its acquisition by IPG) in MAA Bozell while the MAA Group holds the balance.

As of April 2001, MAA Group's earnings stood at Rs 175 crore (Rs 167 crore for April 2000). Peerbhoy said, "By being part of such a huge global network MAA saw big opportunity for growth. There is bound to be change but I don't know what it will be."

© 2001 agencyfaqs!