McCann-Erickson Worldwide's recent acquisition of The Weber Group signals the beginning of "the mass consolidation of PR in the next two years," according to Larry Weber, chairman and CEO of the newly acquired company.
Weber, who said the McCann/Weber deal had been in the negotiation process for about four months before it was sealed Dec. 5, is slated to head a worldwide PR sector for New York-based McCann-Erickson.
The division will become operational during the first half of 1997, according to Susan Irwin, senior vice president of McCann's corporate communications, who added that logistical and manpower issues surrounding the new venture haven't been decided.
The Weber Group, a high-tech marketing communications firm headquartered in Cambridge, Mass. with 1995 billings exceeding $12 million, will remain as a separate business entity and be overseen by McCann-Erickson, a multinational ad agency with billings of $8 billion and operations in 110 countries. McCann has about 10,000 employees. Weber said the Weber/McCann alliance mirrors what many experts say will become the essence of corporate America in the next century - U.S. companies leveraging their power by broadening their international ventures and becoming key figures in the theater of high-tech and new media businesses. And it is a trend that will greatly influence the direction of PR in the next decade as companies consolidate in the United States and then branch out into foreign markets.
Bringing The Weber Group into its fold will allow McCann-Erickson, whose clients include General Motors [GM], AT&T [T] and Nestle [4725Z], to broaden the scope of what it can offer its clients, Irwin said. And it will also provide additional staffers with international know-how, according to Weber. The Weber Group, which is nine-and-a-half years old, has a 30-person office in London handling PR for European clients.
Part of what Weber will do is advise McCann on national and international PR acquisitions in a variety of venues, including financial, food and fashion and the environment. The Weber Group, however, will remain McCann's core PR company and continue to compete in key international markets such as Singapore, Tokyo, Hong Kong, Paris and Madrid.
"I wanted to build The Weber Group into a global PR brand with technology as its focus, but I needed stronger financial backing," Weber explained of agreeing to accept the McCann offer. "There were people who wanted to know what we were going to do in Washington with public affairs and with investor relations, for instance. We found we were needing to invest, ever more rapidly, in equipment, in people, in offices. It appeals to me to grow a global PR network which would compete with the likes of Burson and Shandwick and now I will be able to do that."
Weber, who would not disclose he financial terms of the deal, said partnering with McCann benefits both companies because it allows his 160-employee business to expand internationally while still relying on its reputation as a leading high-tech PR agency. And for McCann, he said, it gives it the opportunity to compete in the PR arena, not just exlusively in advertising.
"We expect to be in the top five (of PR firms) in the world by the Year 2001," Weber added. "Those who remain as the major global players will be the ones with very rapid deployment of technologies, those who use the Web to its full advantage and those who become involved in new media."
Weber predicts that the PR industry will focus on several tiers in years to come. The first tier will be comprised of healthcare, high-tech and investor relations; and the second tier will be made up of entertainment, public affairs and consumer technology. They are all areas where Weber and McCann can now excel given the recent partnership, according to Weber.
In addition to McCann acquiring The Weber Group, it also acquired Thunder House, an interactive marketing firm and sister company of The Weber Group, with clients that include America Online [AOL]] and IBM [IBM].
(The Weber Group, Larry Weber, 617/661-7900; McCann-Erickson, Susan Irwin, 212/697-6000)