Publicis Groupe is having a torrid time in China just now with the switch of the estimated $1bn L’Oreal media business from Optimedia to WPP’s Mindshare coming hard on the heels of the suspension of two leading executives at its Vivaki Exchange media outfit for their alleged involvement in a money-laundering scandal.
Vivaki has recently rejigged its top management in China to try to restore its reputation. Whether or not the scandal had anything to do with Optimedia’s loss of L’Oreal is guesswork at the moment (Optimedia is a Publicis brand) but China media planning and buying is a pretty small pool despite the big billings.
Vivaki’s Warren Hui and Ye Pengtao were suspended after Zhen Zhixiang, a top executive at media broking firm Chongqing Huayu, was arrested for money laundering. CH dealt with a number of other Western media groups too.
As for L’Oreal it is the second-biggest advertiser after Procter & Gamble in China with reported ratecard billings of $2.5bn. This is reckoned to amount to around $1bn after various discounts and commissions are taken into account.
Discounts and commissions being at the bottom of the Vivaki/CH affair of course.
But WPP and Mindshare will be on their best behaviour no doubt. Worsting arch enemy Publicis in China (Mindshare will now be the media market leader in China) will be the icing on the cake for WPP boss Sir Martin Sorrell as he prepares to announce WPP’s latest results.