True North acquisition extends Interpublic’s dominance in the promotion market.
Forget about calling Interpublic Group of Companies an ad agency network. That moniker is no longer accurate.
In 2000, New York City-based Interpublic generated 47 percent of its revenue from disciplines other than advertising, including $1.24 billion, or 22 percent, from promotion and direct marketing. While advertising revenues increased seven percent to $2.96 billion for the year, promotion revenues jumped 31 percent.
While its recent $2.1 billion acquisition of True North Communications, New York City, may briefly swing the pendulum back a little toward advertising — 36 percent of True North’s $1.5 billion in 2000 revenues came from non-traditional business — the future is pointed more toward marketing services.
The acquisition creates the world’s largest marketing communications company, with combined 2000 revenues of $7.2 billion.
Both companies have been actively talking up their non-advertising services over the past year. Interpublic said in its year-end financial release that it expects ad growth “to moderate” this year while marketing services business remains “relatively robust as clients continue to disperse their promotional activities across an array of communications channels.”
The biggest portion of Interpublic’s promotion capabilities reside in DraftWorldwide, Chicago, which has been on an aggressive acquisition schedule and now consists of 43 offices in 22 countries, 1,400 employees, and more than $2 billion in total billings. Recent U.S. acquisitions include event marketer Group III Promotions, Chicago, and New York City creative boutique The Sloan Group.
St. Louis-based Momentum, part of McCann-Erickson, is Interpublic’s second-largest promo “division.” The shop’s billings more than doubled to $127 million in 1999; ceo Mark Shapiro credits much of the growth to the agency’s ability to leverage the client relationships of other Interpublic businesses (June 2000 PROMO). Momentum also went the acquisition route in 2000, buying St. Louis neighbor The Waylon Co.
Having a wide variety of assets is paying off for Interpublic. Draft recently won the hotly contested account review at Burger King (March PROMO) in large part because BK decided to house all its marketing assignments within Interpublic, according to sources close to the review. BK had earlier handed advertising chores to McCann-Erickson, New York City, and Campbell Mithun, Minneapolis.
True North has spent the last two years aligning most of its global promotion-related assets within Marketing Drive Worldwide, Wilton, CT, which had billings of more than $200 million in 2000. The division absorbed such former stand-alone promo shops as Market Growth Resources, FCB Impact, McCracken Brooks Maier, Wells Marketing, and BBG.
Interpublic’s goal of improving its non-advertising resources “was one of the things that attracted us to them,” says True North chairman David Bell, who will serve as vice chairman of Interpublic under chairman John Dooner. “It’s a common vision, and this will just accelerate it.” Interpublic gives Marketing Drive even more resources to leverage, Bell says, citing sports marketing agency Octagon and NFO Research specifically.
Although no mergers of Interpublic and True North divisions have been targeted, “we’ll look at the possibilities,” Bell says.
Marketing Drive underwent a management shakeup this year, as co-ceo Wes Bray, Americas promotion president Mickey Jardon, and relationship marketing president Mickey Goodman — who all joined True North from Market Growth Resources — left the company. Co-ceo Mark Timbrell, who originally came from the London agency that gave the division its name, has moved to the U.S. to fully take the reins.
The change is “a natural migration to a gifted leader,” says Bell. “The creation of the company required a different kind of management team.”
A Wealth of Services Interpublic’s promotional assets
DraftWorldwide
- KBA Marketing
- Group III Promotions
- D.L. Blair
- The Properties Group
- The Sloan Group
- Vogt/Wein
- Columbian Advertising
Momentum
- Momentum North America (Louis London)
- Momentum New York (Diamond Group)
- The Waylon Co.
Marketing Drive Worldwide
- Marketing Drive USA (MGR)
- Marketing Drive Minneapolis (McCracken Brooks Maier)
- Marketing Drive San Francisco (Wells Marketing)
- Marketing Drive Chicago (FCB Impact)
- BBG
- Event Management & Promotions
The Botsford Group
Marketing Corp. of America
CME Promotion Marketing
C-E Communications
Miller/Huber Relationship Marketing
The Zipatoni Co. (49%)
Imada Wong (49%)
Modem Media (45%)
Network
