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Interpublic Aligns Media Assets to Meet Evolving Client Needs

NEW YORK--(BUSINESS WIRE)--Oct. 18, 2006--The Interpublic Group (NYSE: IPG) announced an innovative alignment of its media assets that will position the company to better meet the needs of clients in today's world of empowered consumers and fast-changing media choices.

Under the new structure, the company's major global media operations, Initiative and Universal McCann, will respectively be aligned within Draft FCB Group and McCann Worldgroup. This will ensure that media thinking and expertise plays a central role in both brand and communications planning. Both Initiative and Universal McCann will retain their current senior management teams and their financial independence within their new operating structures. Interpublic's Magna unit will continue to negotiate on behalf of the aggregated marketing clout of all Interpublic media clients. A new unit, to be called Futures Marketing Group, will bring together Interpublic's specialist and digital capabilities to serve as an incubator for leading-edge media tools and solutions. Oversight of this unit, as well as Interpublic's future direction and investment priorities relating to media, will be the responsibility of a newly-created Interpublic Media Council, made up of senior operating unit and corporate executives.

"Media is an increasingly strategic part of our overall offering and an important component of the creative product, yet most marketing services providers deliver an unbundled, often siloed, media product" said Michael I. Roth, Interpublic's Chairman and CEO. "Our new model puts us at the forefront of the trends toward start-to-finish, multi-channel solutions and also addresses the increasingly important digital space - which will position us to better meet the evolving needs of clients. We thank Mark Rosenthal and his team at Interpublic Media, who played a critically important role and drove us to this modern offering that delivers consumer and brand engagement, which have become as essential as the scale and leverage that drive buying efficiency."

"When we created Interpublic Media 17 months ago, we pledged to invest in stabilizing our media operations and beginning to rebuild the core product," explained Mr. Rosenthal, Chairman and CEO of Interpublic Media. "Our progress in these areas has been significant. We also indicated that we would determine the appropriate steps to launch the 'media offering of the future.' Michael and I both believe that we are now in the position to move forward with this new structure, which aligns media within total communications networks and will deliver best-in-class integrated programs, supplemented by the power of Magna and innovative new media thinking from the Futures Marketing Group." Rosenthal will now return from the medical leave he began in July and will stay on in a transitional capacity to assist in making the new Interpublic media model operational. "My leave was absolutely the right thing for me personally and it was great to get my health in order. I look forward to helping Michael get the media model that he and I have been discussing since early this year up and running before moving on to the next stage in my career."

Roth added that the new media strategy represents the third major step Interpublic has taken this year to address the dynamic marketing communications landscape. In March, the company announced that it would re-focus its Lowe agency on its heritage of world-class creativity, delivered in eight key hub markets and in concert with leading marketing communications firms such as Jack Morton, Octagon and Momentum. In June, Interpublic combined its Draft and FCB units around the world to create a modern, channel-neutral agency model that will deliver an integrated, accountable and creative offering that uses consumer insight to incite behavior in the marketplace.

Initiative and Universal McCann

Interpublic's global media companies, Initiative and Universal McCann (UM) will respectively be aligned within Draft FCB and McCann Worldgroup. This close alignment of the media and brand agencies will allow them to jointly create strategic communications channel planning tools and processes contiguous with the creation of brand strategy and planning. The resulting integration of media and creative processes will also result in uniquely powerful marketing programs.

"We are looking forward to partnering with Draft FCB and playing a part in realizing the new agency's vision of end-to-end, channel-neutral communications that put creativity and accountability on an equal footing," said Initiative Chairman and CEO Alec Gerster. "By pooling our complementary tools and intellectual capital, we can develop a truly differentiated media product - one that will provide competitive advantage to Initiative and Draft FCB, as well as all of our clients."

"This new organization is a logical extension of the interdependence model that we have been pursuing with the Worldgroup to respond to the changes that are transforming our industry," said Universal McCann Chairman and CEO Nick Brien. "We will continue to add world-class talent and develop leading-edge communications planning tools and processes. By delivering UM's promise of 'Next Thing Now' to clients, we can capitalize on the increasingly strategic, high-value role that media plays in marketing today."

Magna

Interpublic's Magna Global, the industry's first aggregated negotiation unit, will continue to operate. It will focus solely on negotiating, backed by the full scale and leverage of all of the holding company's media clients, thereby ensuring that clients enjoy maximum buying efficiency. Magna will also continue to serve as a provider of research and market intelligence to all Interpublic buying operations, whether within Initiative, Universal McCann or the US independent agencies.

Cella Named Vice Chairman of Draft FCB

In a related development, Bill Cella, previously Chairman and CEO of Magna Global, has been named Vice Chairman of Draft FCB. In this new position, he will work directly with Howard Draft and report to President and COO Laurence Boschetto on traditional and new media initiatives, play an important role in the group's business development efforts and bring with him Magna's experience and capabilities in the creation of programming and branded content. As a member of the newly-created Interpublic Media Council, Cella will remain involved with oversight of holding company-level clients and in the management of Magna and assets in the digital media space.

"I am very excited about the opportunity to work with Howard in taking Draft FCB to the top as it defines a whole new model for our business," said Cella. "There are tremendous assets in the new group, from Draft's heritage and power as a behavior-driven agency to FCB's global reach and creative capabilities. Initiative brings strong media tools and thinking, as well as a new winning spirit, to the table. As I talk to senior level executives, at both major marketers and media companies, I can see that there is a real appetite for an offering that delivers integrated programs in which there is no 'above the line' or 'below the line' and in which creative and media thinking are one and the same."

Futures Marketing Group

The newly formed Futures Marketing Group will act as an engine for Interpublic and its media assets to offer new communications services and business models to the market. The group will re-architect existing media related offerings, develop new business models and manage digital and new media investments and alliances, such as Interpublic's recent affiliation with Facebook. It will also offer emerging media research and development services. The components of the group will include assets such as the Interpublic Emerging Media Lab, The Consumer Experience Practice (TCEP), Wahlstrom, NSA and other hyper-local media offerings. The Futures Marketing Group will report to the Interpublic Media Council.

Interpublic Media Council

Oversight of the Futures Marketing Group and of coordinated group-wide activities and capabilities, such as Magna, Magna Trading (media barter) and OSI (outdoor media), as well as Interpublic's future media strategy, including M&A and investment priorities, will be the responsibility of a newly-created Interpublic Media Council.

The Council will meet regularly and be made up of one representative each from Interpublic's two major agency groups - Bill Cella as Vice Chairman of Draft FCB and McCann Worldgroup Chairman and CEO John Dooner - the heads of the two major media operations - UM's Nick Brien and Initiative's Alec Gerster - and two Interpublic executives - EVP, Strategy and Network Operations, Steve Gatfield and EVP, Strategy and Corporate Relations, Philippe Krakowsky. Mr. Krakowsky will serve as the Council's Chairman.

Interpublic Media

The Interpublic Media operation will be wound down by the end of October. A number of professional and support staff will be transferring to other Interpublic companies, while a small number of executives will be leaving the company.

About Interpublic

Interpublic is one of the world's leading organizations of advertising agencies and marketing services companies. Major global brands include Draft FCB Group, FutureBrand, GolinHarris International, Initiative, Jack Morton Worldwide, Lowe Worldwide, MAGNA Global, McCann Erickson, Momentum, MRM, Octagon, Universal McCann and Weber Shandwick. Leading domestic brands include Campbell-Ewald, Carmichael Lynch, Deutsch, Hill Holliday, Mullen and The Martin Agency.


    CONTACT: The Interpublic Group
             Philippe Krakowsky, 212-704-1328
             or
             Analysts, Investors:
             Jerry Leshne, 212-704-1439

    SOURCE: The Interpublic Group