Wills slams Publicis Groupe for 'cynical' Mojo closure, Zenith Optimedia soldiers on

  • Media
  • January 17, 2013
  • Ben Fahy
Wills slams Publicis Groupe for 'cynical' Mojo closure, Zenith Optimedia soldiers on

The closure and voluntary liquidation of Publicis Mojo that was announced just before Christmas last year came as a shock—to the employees, to Mojo clients and to the industry as a whole. And in his many years in the ad business Graeme Wills, the ex-chairman of Publicis Mojo Australia and New Zealand and head of new agency Joy, claims he's never seen a company behave as unprofessionally, nastily and cynically as Publicis Groupe has during this saga. 

While the $16 million owed to creditors as pointed out last week is accurate, Wills feels it's slightly misleading, because $15.5 million of that is owed to Publicis Groupe and he says the bulk of this debt relates to the purchase of shares in Mojo Australia in 2006. 

"Publicis, for their own reasons, funded [that purchase] out of New Zealand," he says. And this is why he says there was such a big loss ($6 million) on the books in 2007. 

We've heard plenty of comments around the traps about Publicis Mojo New Zealand being used as something of a tax haven and Wills thinks it's probably tax-related, saying "where the costs end up is a holding company's decision" and "holding companies do all kinds of things with the companies they own", with losses or debt often housed in different countries due to more favourable corporate tax rates or conditions. And there's nothing unusual about that kind of behaviour, he says (although with the heat going on big corporates like Starbucks, Amazon and Google for alleged tax avoidance, this behaviour certainly seems to be getting a bit more attention these days). 

Wills says those numbers created an unfair perception about Mojo's performance. And, as he points out, if a relatively small agency like Mojo in a small market like New Zealand lost $6 million in one year (and this was at a time when it was winning international awards with Nick Worthington at the helm and had a fatter client roster), the management team would be gone. But he says that team has remained fairly stable, with some working there for almost 20 years, so he says the losses are less about the business itself and more about multinational financial jiggery pokery. 

He says he was keen to buy the agency, and was in negotiations to do so last year, but Publicis "took the offer off the table" and instead decided to close "a good agency, with good clients" four days before Christmas (Publicis Groupe has been contacted for comment but is yet to respond). 

Wills doesn't know why it decided to close the agency, and he can't fathom why it did so with "no regard for the clients" (and seemingly no effort to shift them within its network), the long-serving executive team or the staff (he says the staff learned the agency was being closed after a phonecall from the liquidator and they still haven't heard from Publicis). 

"I loved that agency. It did some amazing work, and employed some amazing people," he says. And he believes it was a huge asset to Publicis and helped give it its "creative credentials". But, likening it to the closure of the Campaign Palace in Australia, he believes international holding companies don't seem to value creative agencies as much as they once did. 

Wills says Publicis bought out Publicis Mojo's local shareholders in late 2011. In Australia, it is thought to have paid $50 million for the privilege and Wills was the biggest single shareholder. He says he sold all his shares in the New Zealand operation in late 2011, but he was unable to discuss the figure Publicis paid (local shareholders, including Wills, were still listed on Publicis Mojo's annual return dated November 2012). 

Wills announced the voluntary liquidation of Publicis Mojo last year at the same time he announced the launch of his new agency Joy, and, perhaps not surprisingly, he says the closure has somewhat clouded the news of his new arrival. 

Despite McDonald Vague liquidator Jared Booth saying the directors and owners of Joy could be liable for some of Mojo's debt, Wills said there was no link at all between the two agencies (Wills and Andrew Wynne are the two directors and Razor Group, which also owns US Sydney, is the sole shareholder). Of course, some of the same people and clients are involved with Joy, so there is a definite link in the industry's mind, but he says a decision made by Publicis shouldn't affect the reputations of those who worked at the agency. 

Wills says ex-Mojo partners Kay Boyle and Graham Ritchie are joining the new agency, which he hopes to turn into a "mini network" with an office in New York and, soon enough, Australia. A couple of account managers have also joined, but Mojo partner and executive creative director Lachlan McPherson isn't coming across, with Wills saying he is doing his own thing and consulting. Despite the rumours, he confirmed Toby Talbot wouldn't be joining the agency. 

In the release, he said he hoped Mojo clients would move "seamlessly" to Joy (he says Goodman Fielder has done just that as its foundation client and it is also finishing some work for Nestle). But rather than trying to prosper from misfortune, he says he was trying to be the good guy by offering to finish up work for Mojo's partners who had been left in the lurch by Publicis' surprise decision and hiring those who were unexpectedly out of a job. 

"We're excited about being a new agency in New Zealand," he says. " ... I don't want it to be big, I want it to be amazing". And he says Joy will be selective about who it works with, which means "a lot of clients at Mojo won't be suitable for us". 

So what does this saga mean for Zenith Optimedia? 

Media director Sophia Quilian was unable to be contacted when the news was announced late last year, but, aside from having to do "some admin and logistical stuff", she says it's "business as usual" for the media arm, which is now "wholly owned by Publicis Groupe". 

She admits it's "a fair observation to make" that Mojo and Zenith Optimedia were closely linked. But she was at pains to point out that it is now an (almost) entirely separate entity. 

There's still some crossover between clients, although she says shared clients only made up seven percent of its revenue (its three major clients are Lion, Nestle and Reckitt Benckiser, and it's also working on Qantas). But, adding to the bad news from late 2012, Zenith Optimedia lost the Motorcorp business. It's thought to have gone to Total Media, but Quilian says this decision wasn't related to the closure of Publicis Mojo, which originally won the whole account but had it stripped back

"It just happened simultaneously," she says.  

While Publicis also owns Starcom, Quilian says she's heard no talk of a merger between the two agencies and ZO is still located—at least "for the short term"—in the Textile House building in Parnell. 

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