Call it an advertising acquisition fit for the era of the merger.
The acquisition of homegrown ad agency EvansGroup by the multinational advertising giant Publicis S.A. will help Publicis compete in a time of merger mania - which to ad agencies means fewer clients controlling more ad business in an increasingly global marketplace, according to Jon Johnson, EvansGroup CEO."There are multiple reasons for the merger, including the fact that EvansGroup is a dominant agency in Seattle and we have presence in major growing hubs in the United States," Johnson said.
Under the buyout, Johnson will turn in his EvansGroup title to become chairman and CEO of Publicis Dialog, an integrated marketing arm of Publicis.
"The strategic acquistion gives Publicis coast-to-coast coverage and a strong presence in the vibrant New York, Seattle and Dallas markets," said Robert H. Bloom, chairman and CEO of the new merged Publicis agency, in a release. "The merged firms fit together incredibly well. EvansGroup complements our core competencies in food and beverage, health care and retail, while adding vital new capabilities in technology marketing."
With the acquisition of EvansGroup, Paris-based Publicis will now be among the top 15 ad agencies in the United States. EvansGroup, founded in 1943 in Salt Lake City by David Evans, has been ranked 36th among U.S. agencies with $350 million in annual billings. Along with its Salt Lake and Seattle offices, the company has agencies in Boise, Dallas, Indianapolis, Los Angeles, Portland and San Francisco.
EvansGroup's current clients include Hewlett-Packard, PETsMART and United HealthCare. Publicis' clients include Nestle, Lancome, BMW and TGI Friday's.
Publicis controls a network of agencies across 64 countries. Having lost its U.S. partner True North (which was merged with Bozell), Publicis has been seeking other allies to develop its activities in America, and strengthen its New York-based agency, Publicis-Bloom.
Just last month, Publicis announced it had acquired San Francisco ad agency Hal Riney & Partners. That follows a broad restructuring in April at Publicis' Paris headquarters where company officials said it was time for a "new generation to take the helm." The firm also said it wanted to increase its share of the U.S. market to 20 percent by 2000.
EvansGroup will be officially merged with Publicis-Bloom, which has offices in New York and Dallas, and simply called Publicis. Bloom, of Publicis-Bloom, will lead the new agency, which expects revenues of $90 million in its first year of joint operation.
Johnson, who will report to Bloom, and some employees in Salt Lake City will begin the Publicis Dialog integrated marketing operation. EvansGroup has developed an envied reputation in the area which combines public relations, direct marketing and sales promotion.
Johnson said he has also been charged with quadrupling the size of that business, mainly through acquisition. He doesn't expect any job losses in Utah.
Mergers and acquisitions are part trend in the advertising business, said Robert Fotheringham, a principal at Salt Lake's FJCandN. His firm merged with agency Williams and Rockwood, competing with EvansGroup as the top local ad agency.
However, he said he doesn't see the merger affecting his bottom line.
"I don't think it will make any difference. Maybe in our national business, but not on our base in the Intermountain West," he said.
Fotheringham, said despite the spate of mergers, many of the firms retain local autonomy. It is not uncommon, for example, for firms to continue to compete for clients against a sister firm.
Johnson said it is likely that Publicis and Publicis-Hal Riney will compete for some of the same accounts.