When Publicis London started a consultation with staff last week about the future of the agency with a view to making redundancies, few could be blamed for thinking that it was the £80m worth of account losses at the start of last year that was the catalyst of the changes.
The departure of MFI, Asda and The Post Office in about a month undoubtedly changed the agency, leading to redundancies, a clear-out of its senior management and a difficult 2007.
But that is in the past, according to Publicis bosses, and retaining the £100m Hewlett Packard direct marketing account for Europe, Middle East and Africa has sparked the latest changes. The retention comes just three weeks after the advertising network lost the £100m HP Printing and Imaging business to BBDO, which is understood to have left a significant hole. HP was thought to have been the London agency’s biggest ad account.
However, it is the DM business that is driving this restructure, says Publicis chief operating officer Richard Pinder. It has led to talk of redundancies at the London agency because much of the agency’s “production resource” is going to be moved outside Western Europe.
The tough global economy, which looks set to become tougher still by the end of the year, and the rising costs of raw materials, are also key drivers in Publicis’ decision, according to Pinder. He adds: “Clients need to spend a little less, but also need to be more efficient. We are in a good position as we can use our network to do our global business in areas where it doesn’t cost as much.
“We can get more bang for our client’s buck if we take production out of Western Europe, leaving London as an ideas centre, and Neil Simpson [Publicis London chief executive] will build a team for that.”
Meanwhile, in a further bid to help HP become more efficient, the agency will work in partnership to sell “an HP printing product” that helps reduce costs to its clients. Pinder explains: “We will sell the proposition to our clients, as there are benefits for us, HP and our clients. We will be working hand in hand with the business, but also dreaming up ways to sell it.”
Over in London, the redundancy plan also gives Simpson, the former Adidas and Vodafone marketer who joined seven months ago, the chance to reshape the agency he inherited.
The period of consultation, before which significant redundancies cannot be made, is expected to help Simpson make necessary changes at an agency that had “a deeply rooted culture and behaviour”. One insider notes: “There was a lot of stability and consistency over ten years. The downside is it can be difficult to uproot.”
Simpson is still waiting for the final elements of his management team – Tom Ewart, who will become joint executive creative director with Adam Kean; and Andy Lear, who will be head of planning – to arrive. Both join from now defunct agency Shop.
Despite rumours that it struggled to attract big-name talent for its senior roles, Simpson says he has been looking for people with “different” backgrounds. “Over time, big agencies, whether through neglect or old models, become too heavy on admin and too light on creativity,” he says. “Getting the right people is part of solving that.”
He adds that the new team combined with the agency’s new “Ignite Conversation” positioning, which will see it “ignite the right conversations at the right time for clients” should show the “desire and will” to win.
All eyes will remain on Publicis – both network and London agency – as these strategies are implemented, but both will need to deliver results if the losses of the past are ever to be put to bed.