Do you remember that catchy jingle created by InterpublicGroup
Bank of America dealt a not-unexpected body blow to beleaguered Interpublic yesterday when it announced that it was moving its account, representing between $60 and 65 million in revenues (about 1% of Interpublic's total revenue), to rival and odds-on favorite, Omnicom Group
Mega-agencies Omnicom, WPP Group
Interpublic, the world's third-largest advertising conglomerate, had handled the bank's account for the last three years, managed at the holding company level and encompassing a full spectrum of advertising services provided by 16 of its agencies.
While it's not at all uncommon for clients to change allegiances in the advertising world, the loss of the Bank of America account is particularly damaging because of its significant size. And the abandonment by the Bank comes on the heels of other top companies such as General Motors
Several factors may have led to Bank of America's departure, according to industry sources, including such matters as perceived ego clashes between top executives at Interpublic and Bank of America, cited disappointment in the agency's creative strength, purported heavy-handed contractual provisions desired by Bank of America, and -- not least of all -- the agency's accounting issues.
Interpublic has not filed full-year financial reports for 2004, or the first two quarters of 2005, and continues to review possible accounting irregularities stemming from improperly consolidating the results of acquired companies for as far back as nine years. The agency plans to file its reports by Sept. 30, but it hasn't updated investors on this matter since April. And in July, the agency hired its fourth chief financial officer in three years.
I wouldn't have showered Interpublic with investment dollars even if it had remained hitched to Bank of America, and I certainly wouldn't do so now even if it were to reel in other suitors. Gossip whirling around a relationship can be interesting, but no one really knows what goes on behind the closed doors of a marriage except the two parties themselves. But regardless of the ultimate reason behind Bank of America's abandonment, Interpublic must get itself a financial makeover and maybe brush up on its creative charms before it's able to reel in more beaux with deep pockets.
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Fool contributor S.J. Caplan welcomes comments. She does not own shares of any of the companies mentioned in this article.
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