Last Updated Dec 4, 2008 11:22 PM EST
Sure, the story contains some business-ey info about how "the growth forecast for 2009 was cut by one-third to 4 percent," but that ain't news. BNET readers are intimately familiar with the state of adspend.
No, the real juice of the story is the -- slim -- notion that when it comes to Sorrell vs. Levy, it's personal! Here's a condensed version of the story, with its claws out. All that's missing is the scene in which Levy (below, the silver-haired, continental lothario) throws a glass of red wine in Sorrell's face, and Sorrell (top, the stiff knight of the realm who guards a heart of fire) throws down a white kid glove and demands "satisfaction."
As the ad slump deepens, the rivals have traded snipes, jockeying to be perceived as best able to ride out the crisis.Jockeying is normal behavior for ad agency CEOs. That's how they make money. But if you're looking for snipes, you might be dissappointed. Bloomberg's evidence is a long time coming.
"Levy promises the earth and delivers the stars," said Alexander Wisch, an analyst at Standard & Poor's Equity Research in London. "Sorrell promises heaven and delivers the earth."On this basis, bet on Levy's Publicis, yes?
"Martin has his pulse on the market. He knows what's going on, but Publicis cannot be counted out," Wisch said. "If I were to pick a digital battle Publicis would win. Emerging markets and China would be Sorrell."Thank you for that confusing advice, Mr. Wisch. We'll get back to you.
The goal of advertising is to evoke emotion and seduce customers, Levy said in an interview last month in his office in the Publicis glass office building along the Champs Elysees, opposite the Arc de Triomphe monument. "From our European point of view we view the world as a mosaic of cultures.""The Arc de Triomphe monument"? As opposed to the Arc de Triomphe drinking fountain? And how exactly is this "mosaic of cultures" nonsense advancing the bitch-slapping which was promised at the top of the story?
While confronting the current marketing slide, he and Sorrell have found time to nurse their two-decade rivalry.Finally, we seem to be getting somewhere.
Sorrell came out on top in the 2003 bidding for Cordiant Communications, taking advantage of WPP's position as the target's main creditor to win his prize. He also outmaneuvered Levy to win advertising agency Young & Rubicam in 2000 and Grey Global Group Inc. in 2005.Ok, this is more like it. Keep it going, Schweizer!
The WPP chief executive criticized Publicis earlier this year for the Google partnership, implying that Levy, the board chairman and also a trained engineer, had "a bit of an Achilles' heel" when it came to technical matters.Is that the best you've got, Sorrell? He's French and he owns a bunch of U.S. agencies! That's material enough on its own!
WPP forged its own partnership with Google in October, and Sorrell now calls Google a "friend-frenemy," no longer just an "enemy.""Frenemy"? LOL! OMG! Sorrell has totes learned how to text like a 13-year-old girl!
Levy says Sorrell "recognized now that he's been totally wrong" and is now "following us on all of our steps."Finally, some action.
The verbal sparring continued last month. At a conference in Barcelona, Sorrell suggested it would make sense for Publicis to merge with Interpublic Group of Cos., the second-largest U.S. owner of ad agencies, as the crisis forces consolidation.Tactical mistake by Sorrell. Never suggest that your enemies should get bigger than you. Not the first recent corporate strategy error by Sorrell, either.
Levy shot back that Sorrell ought to pay attention to his profit margins rather than Publicis, which generated 2007 earnings before interest, tax and amortization at 16.7 percent of sales, above WPP's 15 percent.
"We are very different in terms of style from WPP and the result is that our margins are much higher," Levy said. "If you look at the bottom line our cash flow and margins are the highest in the industry."Game, set and match to Levy, methinks. We'll all be drinking Beaujolais and eating brie by the end of fiscal '09! Or will we? What do you think, S&P analyst Wisch?
Investors should sell both stocks, according to Wisch.Bury the lede, why-don't-cha!