Ambience without D'Arcy?

By , agencyfaqs! | In | October 23, 2002
The fate of the Indian agency will be decided in the next few weeks

It was in the offing for a while, and when the announcement was finally made on October 14, 2002, not many seemed surprised - at least not at the international level. Ever since formalities of the Publicis-Bcom3 merger were completed on September 25, 2002, speculation was rife about the fate of D'Arcy Masius Benton and Bowles, popularly called D'Arcy in India.

For Maurice Levy, chairman and CEO of Publicis Groupe SA, the Paris-based parent of the now-defunct group, the task on hand was to downsize or rightsize (to use the politically correct word) the fourth largest communication group after the merger between the Chicago-based Bcom3 network with the sixth largest communication group Publicis Groupe SA was first made public in March this year.

This merger meant the coming together of powerhouse networks such as Leo Burnett, D'Arcy Masius Benton & Bowles, Ayer, Manning Selvage Lee, Bartle Bogle Hegarty (Bcom3 has a 49 per cent stake in BBH), Starcom Mediavest, Publicis Worldwide, Saatchi & Saatchi, Fallon Worldwide and Zenith Media Worldwide among others. This also meant consolidating the group as the fourth largest in the world and, of course, entrusting the mandate of running the conglomerate on the shoulders of the Parisian gentleman and his coterie.

For a man who has a penchant for cutting costs and combining back office functions among agencies, winding up operations of D'Arcy did not seem to be such a far-fetched idea. Signs of it became apparent when D'Arcy closed its 96-year old St Louis office in the US in late March this year, closely followed by its slashing of 50 jobs at the New York office in April owing to the global realignment of the estimated $75 million Pampers diaper account from P&G to Saatchi & Saatchi, New York.

Last week, the venerable Levy announced his plans to disband the D'Arcy network, merging it with existing groups, Leo Burnett, Saatchi & Saatchi and Publicis Worldwide.

This dismantling means that the agency network ceases to exist, raising questions about its equity stake (according to media reports, D'Arcy holds a 53 per cent stake in the agency) in the Indian agency, Ambience Advertising. Elsie Nanji, vice-chairman and chief creative officer of the agency (she is also the agency co-owner along with CMD Ashok Kurien) proffers this explanation about Ambience's future, "A legal agreement between D'Arcy and us specifies that we have exclusive management control of the agency till March 31, 2005. We are in the midst of a buyout and until and unless D'Arcy completes the buyout process, Publicis can't do anything. They have to honour the agreement (the agreement was arrived at in April 1999 when both Kurien and Nanji decided to give majority interest in Ambience to D'Arcy). Besides, let me add that despite being the second in terms of size (after Leo Burnett), we are financially the strongest among the four group agencies in the country."

Incidentally, the agency has bagged a number of plum accounts in recent months including General Motors, Nutrela, Hit (a mosquito repellent brand), Add Pens, Elf Lubricants, Playwin and Himani, adding to its existing client base including Lakme (HLL), Parachute (Marico), Parke Avenue (Raymond's), Bisleri, Whisper and Vicks (P&G), Nerolac and Western Union (global money transfer giant) among others. According to Nanji, network clients account for 15 per cent of the agency's business, with the balance 85 per cent coming from Indian clients.

In fact, in a letter dated October 14, 2002 to employees and clients alike, Kurien, had said, "This (the discontinuation of the D'Arcy brand) could mean realignment of the MNC businesses that we have acquired as part of the D'Arcy network. Fortunately at this point these businesses only account for 15 per cent of our revenues and even in a worst-case scenario this will have minimal impact on us. I do not anticipate any significant impact given that eventually these businesses will move only after a plan covering all the issues has been formulated in detail."

The letter also says, "Having taken the macro decision (of discontinuing the D'Arcy brand) no strategy has been formulated for the implementation of the same by country. Given the terms of our agreement, any such decision for India will have to be taken in consultation with me and Elsie."

Nonetheless, it is precisely this question that remains unanswered: Will the suffix D'Arcy continue in India? Nakul Chopra, president, Ambience D'Arcy takes a cautious stand on the issue. "The implications of the global decision are being worked out; I cannot reveal anything right now. But yes, internally, we are going to decide in the next two to four weeks, what we want to do next," was all he would say. © 2002 agencyfaqs!

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