Given that the new Weber Shandwick, created by the merger of Interpublic’s two largest public relations brands, will in all likelihood end 2000 as the largest public relations firm in the world, it’s clear that the critical mass is there. And both Weber and Shandwick were growing at a healthy rate before the merger, with Weber up close to 40 percent, and Shandwick up 12 percent. The major question mark is whether the clash of the two cultures will derail organic growth—though even if it does CEO Larry Weber appears to determined to continue with new acquisitions. Weber’s new business wins in 2000 included SGI, Avid, FileMaker, and Fleet Fusion, and the firm grew it relationships with clients such as Monster.com, Polaroid, and Verizon. Shandwick, meanwhile, picked up Lycos, James Martin, United Distillers & Vintners, and Trade Ranger, and added new assignments from existing clients Hewlett-Packard, Kodak, Coca-Cola and Microsoft. Particularly good news for Shandwick was an increase in the number of clients shared with other IPG agencies, among them Reliacast, Coca-Cola, TheLaw.com, and Friskies.
Weber Shandwick is looking to develop around several “global hubs,” which include New York, Boston, Washington, Minneapolis and L.A. in the U.S. Of those cities, New York is the weak link. Shandwick has struggled to establish itself as a major player in the world’s largest PR marketplace, and Weber gave up its Big Apple operations to Golin/Harris in the merger. Newly appointed GM Paul Costello has the office on track, but if it is to break into the top five (the agency’s goal) he has his work cut out. Weber is clearly the market leader in Boston, and a major force in Silicon Valley—two key markets—while Shandwick has its Cassidy & Company/Powell Tate operations in Washington and its Rogers & Cowan entertainment marketing behemoth in L.A. Shandwick also has impressive operations in Minneapolis and Baltimore, although clients in those markets tend to be smaller.
The agency’s overseas hubs include London, where Shandwick is still the market leader among the multinationals; Brussels; Hong Kong; Singapore; Tokyo; and Sydney. Almost all of the international capabilities were previously part of the Shandwick empire. Shandwick is now the largest PR network in Europe, with particularly strong capabilities in the investor relations and technology sectors. The agency also has substantial operations in the Asia-Pacific region. The challenge—as with the domestic operations—is giving the new Weber Shandwick offices a strong unified identity and a strong unified culture.
The new agency is focused on five key areas: high-tech, public policy, financial communications, healthcare and life sciences, and lifestyle and entertainment. Both Shandwick and Weber were among the leaders in the technology sectors, and with two strong brands (Weber and Miller/Shandwick), the merged firm is clearly the number one agency in this key arena. Powell Tate (operating again under its own brand) gives the new firm a leadership position in public policy, while Rogers & Cowan has the entertainment sector covered. But in healthcare and financial communications, the merged entity has a lot of work to do. Red Whistle, a new consumer technology practice launched by Weber, is the first in a planned series of “hyper-practices,” and has picked up business from Mattel Interactive, Fox Interactive, and others.
The merger of Weber and Shandwick created a strong leadership team, assuming it can work together: Larry Weber sets the vision, Scott Meyer creates the architecture for implementation, and Marijean Lauzier plays a hands-on role in executing. But the merger also led to some defections, particularly among senior level executives who had been part of Shandwick—including Lord Chadlington, Michael Murphy, and in the U.S. Steve Conafay and Mary Jeffries. On the other hand, there were several key hires, including Keith Lindenburg, formerly vp of corporate communication at IBM, as executive vp and head of the east coast region for Weber; David Nobs as executive vp in the consumer and lifestyle group; and Sandy Gilmor, former foreign affairs correspondent, in Washington, D.C.
Shandwick had invested heavily in human resource initiatives, including a learning program that included the firm’s Reputation Management University, a leadership development program, and training in new media and Internet topics, but still looked more like a loose confederation of acquired agencies than an agency with a single culture. Weber has invested in several bold initiatives, including a program it calls [email protected], which emphasizes flexibility and work-life balance, and offers paid sabbaticals, child-care referrals, but has a culture more suited to the entrepreneurial, 100-person firm it recently was than to a mammoth $300 million global agency. Creating a single cohesive culture will be the biggest challenge for the merged entity over the coming months.
Shandwick’s work ranged from sports marketing support for Coca-Cola’s NASCAR sponsorship to issues management assistance to KPMG on e-commerce positioning to public affairs to campaigning for Microsoft in its instant messaging war with AOL. Weber’s work for Lexmark, meanwhile, won numerous awards and positioned the company as second only to Hewlett-Packard in the printer industry. The firm also continues to work for General Motors on its eGM initiative, and Monster.com.
Shandwick has invested a good deal of time and energy in coming up with a solid, research-based approach to corporate reputation management—and to implementing it throughout its international network. Weber, meanwhile, introduced a new, proprietary tool, Signature, for creating brand value by helping companies imprint their “signature” on the marketplace, linking PR programs to business objectives. The firm also offers a unique approach to the Internet, through its Blue Chip to New Chip approach, which helps both traditional brick-and-mortar companies and digital innovators position themselves on the web. The two firms between them have methodologies that ought to appeal to both new and old economy companies.
Weber’s name has great potency in the technology arena, where it has established itself as a leader long before founder Larry Weber decided to pursue a bolder, broader strategy. The Shandwick name—despite the considerable resources the agency assembled—never really resonated. Now the new entity, unimaginatively renamed Weber Shandwick, starts with what is essentially a blank piece of paper. The worry is that right now the company doesn’t stand for much of anything except bigness. That has to change over the next 12 months in Weber Shandwick is to hold on to its leadership position.
One of two things is going to happen: either Weber Shandwick, with the generous backing of parent Interpublic, is going to continue to make acquisitions to stay ahead of the pack, adding new capabilities in the U.S. and enlarging its overseas operations; or the difficulties of merging two very different cultures is going to overwhelm the agency’s management and Weber Shandwick is going to become the Daimler Chrysler of the PR industry (or perhaps the Hill & Knowlton-Carl Byoir of the 90s). A good deal is going to depend on management style, and the ability of the Weber people—clearly the dominant force in the new company—to win the hearts and minds of the former Shandwick team.