Publicis Groupe’s Levy sets out to trump WPP’s Sorrell with $540m LBi digital agency network buy

Anything you can do, I can do better..

No sooner has WPP’s Sir Martin Sorrell snapped up digital agency AKQA for $540m than arch-enemy Maurice Levy of Publicis Groupe buys biggest remaining indie digital network LBi for, yes you’ve guessed it, $540m.

Levy (left) will add LBi to his already impressive line-up of digital shops including Digitas, Razorfish, Rosetta and Big Fuel thereby allowing him to say that PG is ahead of the rest of his marcoms rivals in the digital stakes.

LBi, which is a bit of a ragbag of digital businesses based on software, was supposed to be falling into the clutches of Omnicom, which has so far tried to do digital within the confines of its traditional agencies (and presumably still is).

Is it a good deal for PG and LBi? LBi says it gets access to a global network and all that stuff, but the money’s the thing. Digital networks just don’t make enough money to expand around the world on their own so they need venture capitalist/private equity backing which makes them easy prey for the big marcoms groups.

Levy says he’s now the top digital dog (if he wasn’t before) so he’s happy. A few weeks ago he was reported to be lining up a deal for Interpublic although eventually he denied it. Interpublic has remained schtum.

Does $540m LBi rule out a deal for Interpublic, which would cost $6bn or so? Not necessarily, IPG boss Michael Roth might take the view that he’s now hopelessly out-matched in digital so he may as well cave in graciously.

What does WPP’s SMS think? He’ll take the view that AKQA is better than LBi as an advertising property but also recognise Levy likely sees LBi as another way into broader consultancy, just as he described the acquisition of Rosetta.

Don’t be surprised if the WPP cheque book comes out to play soon.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.