Publicis, Omnicom and the folly of hereditary succession

Only the Dalai Lama or the Windsor family should anoint successors five years ahead of time, but that is the way the Publicis and Omnicom merger is heading – placing the interests of Maurice Levy and John Wren before anyone else, including clients and stakeholders. By Dominic Mills.

I don’t know if Maurice Levy and John Wren have actually settled yet on a new name for the Publicis/Omnicom tie-up – PubliCom sounds just so anonymous and boring – but information dribbling out in the week shows that they’ve settled a rather more contentious issue: the longer-term succession.

And what a stitch-up it looks. As of early last week, this is how things were shaping up. Maurice and John (funny how this seems the natural order in which to write our co-conspirators’ names) would act as co-CEOs for 30 months after the merger is complete – a process which looks as though, given a fair wind and minimal regulatory interference, will not finish until early 2014.

After that, Maurice takes over as chairman to be succeeded in that role by – yes, you’ve guessed – his new best mate and former co-CEO John.

Cosy or what? This will happen, so the small print revealed, five years after the merger completes – i.e. about 2019. The only caveat is that Maurice and John must first have decided who will succeed John as CEO.

This jobs-for-the-boys arrangement underlines, not that it is much needed, the real nature of the deal: that it puts the interests of the merging parties, and specifically Maurice and John, before anyone else – say clients or stakeholders.

I am, I’m sorry to say, no corporate governance expert, but this agreement must be pushing at the boundaries of what is considered normal. Of course the respective boards of Publicis and Omnicom have rubber-stamped it, but then it is clear they know which side their baguettes are buttered.

But the shareholders? Put it this way, if I were a shareholder I would be wondering why, and how, they could possibly decide now who should chair PubliCom in five years’ time, let alone who should be CEO in 30-plus months’ time.

What happens if it all goes tits up? What happens if, during his tenure as sole CEO (starting in mid-2016), Wren underperforms?

How can anyone tell if he is the right man for the job by that time? We know a lot can change rapidly in this climate. Five years ago Facebook had just hit the 100 million user mark (versus 1.2 billion today); in 2008, Twitter was hosting 3 million tweets a day (versus 230 million a day now).

But Wren is the man whose reluctance to invest in a) digital and b) emerging markets has led to the Omnicom weaknesses this deal is supposed to rectify. How’s that for his ability to anticipate the future and grapple with the next generation of tech behemoths (another supposed rationale for the deal)?

Nobody, unless they are the Dalai Lama or the Windsor family, should anoint their successor five years ahead of time.

One consequence of this is to leave a whole layer of disaffected staff just below Maurice and John. Spare a thought for Jean-Yves Naouri, COO of Publicis and long-rumoured to be the front-runner to succeed Maurice. He will no doubt be dusting down his CV, as will others at Omnicom.

There will be thousands of worried staff at Publicis and Omnicom agencies looking to their immediate superiors for reassurance and comfort. But they might have trouble finding it because their bosses too will be recalibrating their own careers.

Meanwhile, let’s enjoy some of the sledging this deal is generating. Sir Martin Sorrell was up early last Monday to get a quick jibe or two in such as “mergers of equals don’t work” and “there are fundamental doubts about the wisdom of this move”.

Not to be outdone, Big Mo lost little time in replying: a lot of comment, he said, was generated by those who felt “extremely insecure”.

He followed up by noting that there were “two kinds of people in this industry” (one, clearly, being him and his mate John) – “and there’s another kind I won’t mention”. Hmmm, wonder who he’s got in his sights.

Penelope Cruz ad: not high art but a bunga-bunga party

Inside every famous actress is a…what? Well, most of you wouldn’t say wannabe soft porn director, but it’s hard to know what else to conclude with this latest YouTube wonder.

But before you watch it, take time to reflect that the auteur behind the camera is no other than Penelope Cruz, one-time muse of Pedro Almodovar, former girlfriend of Tom Cruise and currently married to Xavier Bardem. Oh, and part-time underwear designer contracted to Agent Provocateur.

Ok, now go watch the 6-minute sleaze fest which closely resembles how I imagine one of Silvio Berlusconi’s famous bunga-bunga parties would be.

It makes all the sexism rows about Wonderbra’s Hello Boys look like kindergarten stuff.

Roughly speaking, here’s the plot: ordinary bloke goes to party, puts on magic x-ray specs and, suddenly, all the girls are all wearing underwear. Looks like he’s the only bloke there. Woo-hoo! Cue five minutes of pure raunch and near-naked, posturing ladies. As the action gets unbearably hot, we cut to see our hero being woken by his boss. Turns out it was all a dream, and he really works on a building site.

Now, roughly speaking, here’s another version of the plot: once-famous actress wants to be taken more seriously and develop her talents; gets a gig designing underwear for Agent Provocateur; decides that what she really wants is to get behind the camera and become an ‘artist’; scripts and directs film; makes film a family affair by including her sister (pregnant, developing new line on sexy pregnancy underwear), husband (gruff building site foreman) and brother (music).

Oh, alright, maybe that’s a bit unfair. You’ve got to be careful using celebs in ads, but using them to write and direct is, potentially, even riskier especially when it’s their first time behind a camera.

But it makes for great publicity, and if you can’t get your star to strip off, you might as well make her famous for getting other people to strip off.

It looks as though this is really all about an attempt by AP to go mass-market with a lower price point. From there it can take on the likes of M&S, which has teamed up with Victoria’s Secret to launch its own raunch range.

Like any private equity-owned business, AP needs to expand and fast. Going mass-market is the best way to achieve that.

But using soft porn is a double-edged sword. Yes, there’s all the free publicity. But there’s also the inevitable backlash. Which is probably exactly what they’re looking for.