Publicis Groupe will merge Frankel with Leo Burnett’s interactive shop iLeo North America, direct-marketer Semaphore Partners and promo shop Arc (formerly Clarion) to form Arc North America, headquartered in Chicago.
The new agency will have estimated revenues between $100 million and $110 million and as many as 600 staffers in five offices, each handling promotions, direct and interactive. More Publicis-owned shops could be folded in, and U.S. offices could begin working with Arc offices in Europe and Asia as early as this year.
Arc North America keeps the Frankel moniker as a sub-brand, and Frankel’s current president-CEO, Dick Thomas, becomes Arc North America president-CEO. Arc reports to Leo Burnett Chairman-CEO Linda Wolf.
“We endeavor to quickly become best in class with the holy trinity of promotion, direct and interactive marketing,” Thomas said. “Our growth will be vertical and horizontal, with new clients and deeper relationships with current clients.”
Plans call for three Arc offices in Chicago (possibly headquartered in Burnett’s building there), one on the East Coast and one on the West Coast. Separate offices ease client concerns about possible conflicts and gives Arc national scope. The agency may move or use current space in San Francisco (Frankel), Greenwich, CT (Arc) or New York City (Semaphore). Management will be decided for each office in the coming weeks.
Paris-based Publicis was expected to consolidate its marketing service agencies early this year (Jan. 15 Xtra). Publicis re-branded 32 marketing service offices in 19 countries (including Greenwich-based Clarion) under the Arc name in July. Burnett took control when it absorbed D’Arcy Marketing Services Group in the fall. That gave Burnett instant visibility overseas via Arc offices in Europe and Asia.
But Arc “won’t be a backend Burnett shop working only with Burnett clients,” Thomas said. “We can’t depend on them for our growth.”
In 2003, Frankel won business from Diageo, the U.S. Army, Johnson & Johnson and Coca-Cola Co. The agency has narrowed its focus to pitching big accounts, rather than pursuing a wide range of new business.
Frankel and Burnett work together on McDonald’s Corp. business and jointly pitched Gateway. The agencies joining Arc have no client conflicts; in fact, Semaphore and Arc’s Greenwich office both work on General Motors.
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