Leo Burnett Merges Interactive, Direct Units

Venerable ad agency Leo Burnett Worldwide is merging its interactive, direct and database businesses into a single unit, in a bid to better service clients looking to communicate with customers through one-to-one messaging.

Under the plan, the new unit will be dubbed iLeo — that’s “i” as in “individual” — and will act as an independent, multinational agency network handling clients that include General Motors, Procter & Gamble, Morgan Stanley, Adidas, and the U.S. Army.

In North America, iLeo will aggregate interactive shop Chemistri and direct marketing agency LB Customer Group. Peter Steinhauser, a database and direct marketing veteran and head of Leo Burnett’s direct marketing practice, will oversee the North American unit. Previously, Steinhauser served at direct and database players including Rapp-Collins, McCann Direct and Acxiom.

The new group also will assume control of agencies in more than 20 countries. Bant Breen, who serves as global director of digital communications for Leo Burnett U.K., will assume the role of regional director for Europe, Middle East and Africa. Former Chaitra Leo Burnett exec Sumeet Kanwar will serve as regional director for Southeast Asia. South American units will report to Giacomo Zandomenego, group president of Leo Burnett Latin America.

The idea is to bring interactive in tighter with direct and database marketing — though it’s not clear whether this will mean changes in the way that Leo Burnett approaches its online efforts. Chemistri, for instance, has done recent work for the U.S. Army and Altoids — in large part featuring brand advertising-focused rich media. The agency’s motto, “We want to expand your brand online,” also would seem somewhat at odds with the philosophies behind direct and database marketing.

But executives at the new agency network say there will be little lost, and much gained, from the merger.

“This is not a shift away in terms of importance or capability from digital solutions and rich Web experiences,” Steinhauser told internetnews.com. “If anything, it’s reinforcing that with some of the fundamentals of direct marketing.”

“What we see and what we saw with Chemistri and the Customer Group were two different but complementary groups of skills and people,” he added. “At a very tactical level, I suppose, the folks we see in Chemistri who have done some seriously cutting edge work for clients like the Army, who have creative Web site environments … are very different than the talent in the Customer Group. Bringing the two together allows us to sit down with a client and ask what kind of relationships you are trying to building with a customer base.”

Leo Burnett also said that once the iLeo transition is complete, the group would offer expertise in direct response acquisition, retention and loyalty campaigns, customer strategy, campaign and content development, online and offline production.

In any case, the move represents at least one important shift for Leo Burnett, which has earned a reputation for greater focus on brand advertising rather than direct and database marketing.

The move also follows other organizational, efficiency-drive changes made in the wake of the finalized acquisition of Chicago-based Leo Burnett’s parent, Bcom3, by France’s Publicis. Last week saw Bcom3’s D’Arcy Masius Benton & Bowles being phased out, with accounts and employees going to Publicis USA and Saatchi & Saatchi.

But iLeo execs charge that its creation has little to do with the changes going on at its parent company.

“In this case, it’s really complementary services that are being aligned,” Steinhauser said. “Certainly, there’s some back-office efficiencies, but it’s more from a strategic standpoint — LB Customer Group has a very strong customer analytics group that was not present in Chemistri. When one talks about capturing rich data in a Web environment, you now have that power, which Chemistri might not have had on its own.”

“This has been a strategy that we have been working on for a year and a half,” he added. “It is very important that iLeo be regarded as a leader in the digital arena. What you will be seeing from us over the next couple of months are different messages, examples, and communications that really underscore what iLeo needs to represent — a combination of the expertise of Chemistri with deeper capabilities in the direct space. And the reverse of that is also true.”

Other Bcom3 interactive units, including media buyer StarcomIP and Semaphore Partners, are not expected to be involved in the changes. Semaphore itself came about last year in an earlier effort by Bcom3 to consolidate its holdings, through the merger of two of the holding company’s largest interactive shops, Giant Step and NOVO.