Interpublic is dismantling IPG Media and for the second time in less than two years it will reorganize its media operations, which include Initiative, Universal McCann and Magna Global. The reorganization was announced today.

Umbrella unit

The changes will create an entity, dubbed a media council, to replace IPG Media, an umbrella unit introduced in mid-2005 by Interpublic Group of Cos. to direct and manage its various media agencies that was led by former MTV Networks executive Mark Rosenthal.

The new structure, it is hoped, will promote interdependence between the holding company’s creative agencies and media agencies, according to one executive familiar with the plans. The IPG Media name will be phased out over the course of the transition.

“IPG Media was a huge investment in a lot of unnecessary overhead,” this executive said. “The new arrangement focuses investment on the brands.”

Major execs on council

The media council’s members will include Alex Gerster and Nick Brien, heads of Initiative and Universal McCann, respectively, according to one executive familiar with the plans. A second executive said the chiefs of Interpublic’s largest creative agencies will also sit on the council. Those leaders include: John Dooner, CEO of McCann WorldGroup; Steve Gatfield, CEO of Lowe Worldwide; and Bill Cella, who now heads media-buying unit Magna Global but will take on a new role representing DraftFCB on the council.

While DraftFCB, Initiative, Universal McCann and McCann Worldgroup will remain separate brands and maintain financial independence, the dollars from Initiative and Universal McCann will be rolled into the bigger agency brands of DraftFCB and McCann Worldgroup, respectively. With the exception of Bill Cella leaving Magna to act as DraftFCB’s representative on the media council, all senior management teams will remain intact. Magna will continue to negotiate media buys for Interpublic clients.

The shift does not mean that the media agencies will be unable to work with other creative agencies, and they will still be go-to shops for clients looking for media-only solutions. The main gist of the move is to get the media-planning function back within the agencies, said one executive with knowledge of the plans.

A voice for Lowe
Mr. Gatfield will join the council in his capacity as an exec VP in the Interpublic corporate structure, but it is expected that he will also be able to provide a voice for Lowe.

The reorganization’s greatest impact will be on Initiative Worldwide, which has for years operated fairly independently of any of Interpublic’s creative agencies in most markets. It will also greatly benefit DraftFCB, which will now be able to offer marketers a full range of media services.

Universal McCann — which in recent years won some independence from its creative sibling McCann Erickson, when it established its own profit-and-loss statement — will continue to operate pretty much as it has since the arrival of Nick Brien, the former head of Publicis Groupe’s media-services unit Arc Worldwide, in summer 2005. Interpublic is also creating a new unit, Futures Marketing Group, that will house the company’s specialist and digital capabilities. The council will oversee it and direct Interpublic’s future media initiatives.

Mr. Rosenthal, the CEO of IPG Media, has been on medical leave since July. He will return and oversee the transition of IPG Media to this new structure, said one knowledgeable executive. What Mr. Rosenthal’s long-term role will be with Interpublic remains unclear. In a statement in the release announcing the changes, Mr. Rosenthal said, “I look forward to helping [Interpublic Chairman-CEO] Micheal [Roth] 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.”

In wake of Santisi exit
Earlier this week, Terri Santisi, Interpublic’s chief financial officer, who has been running IPG Media in Mr. Rosenthal’s absence, resigned to become the exec VP-chief financial and administrative officer at IMG Sports and Entertainment.

One media-industry executive said Interpublic hasn’t named an outsider to run its media entity because finding someone to run it has been difficult. The shifting strategies, as well as the loss of some of its larger clients — such as General Motors — in recent years, has led many to lose faith in Interpublic’s ability to be a substantial player within media. “They just haven’t been able to find their Irwin Gotlieb,” quipped this executive.

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