A Freud/Publicis split would make plenty of sense
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Holmes Report

A Freud/Publicis split would make plenty of sense

Arun Sudhaman

According to this FT story, Matthew Freud is looking to buy his agency back from Publicis Groupe. This will not come as a major surprise; it has been the subject of speculation for some months now, and Freud has done this before with Omnicom Group. Freud Communications is - arguably - the crown jewel within Publicis Groupe's PR offering. However, the UK firm has pointedly declined to adopt the new brand identity of MSLGroup, the network which now combines all of the group's PR resources under Paris-based CEO Olivier Fleurot. Apart from the London 2012 Olympics business, furthermore, it is difficult to think of any accounts where the two parties cooperate. As one Freud senior executive said to me earlier this year, you have to ask how the firm is benefiting from its presence within Publicis Groupe. The firm has had a strong year, winning Bupa and London 2012 and - perhaps more significantly - becoming Mars' key global corporate PR agency. You could argue that Publicis, with its 50.1 percent stake in the agency, is currently getting the better of the deal; particularly if you factor in Freud's lack of progress - it closed its New York office in early 2009 - in terms of international expansion. Nevertheless, the firm's evident lack of enthusiasm for the MSLGroup project must also be taken into account. It is unlikely Fleurot will be overjoyed at the prospect of losing an iconic name like Freud, but hard to see how an exit will materially impact MSLGroup's progress. There is even less reason to think that such a development would make much difference to Freud's performance either. Apart from differences over valuation - which appear to be the key sticking point - it is therefore difficult to find many good reasons for why the pair should stay together.
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