- Two of the biggest ad holding companies, IPG and WPP, have announced plans to withdraw from Russia, but other advertising giants remain.
- Execs at some of them have expressed disappointment and asked leadership to explain why.
- Two holding companies, Omnicom and Publicis, market several Russian state-owned entities, per a Yale report.
This article was originally published March 11 and has been updated.
Ad holding company IPG said March 14 it would suspend operations in Russia, after rival WPP made a similar announcement.
Yet other major ad agency networks continue to maintain offices or affiliate operations in Russia, and some employees have pressed their leaders for an explanation.
IPG CEO Philippe Krakowsky posted that the company decided to suspend Russian operations after wrestling with the fact that doing so would mean abandoning 200 colleagues in the country. With the war escalating, the company couldn't live up to its principles, he said.
IPG operates several Russian affiliates in partnership with Russian agency ADV Group and in 2015 acquired a majority stake in the Moscow offices of agencies McCann, FCB, and MullenLowe. Owning 51% or more of an affiliate gives a partner power to control that company's decisions.
A top WPP exec with direct involvement said the company couldn't see how it could stay and thought the best way to protect its Russian employees was to act unilaterally so they couldn't be blamed for the pullout.
"We don't even know how to get money into the country," this person said. "And in the long term, is this a country where you want to operate?"
Insider spoke to more than a dozen current and former Publicis, Omnicom, IPG, Dentsu, and Havas executives last week, most of whom requested anonymity due to the sensitive nature of the topic.
Employees are pressing leaders for answers
Most said they they think their companies should withdraw from Russia altogether; several expressed disappointment that they haven't.
"The issue is coming up weekly as things get worse," an IPG exec of the war in Ukraine.
Alex Andreyev is a Ukrainian-born, US-based advertising executive with Russian ancestry who previously worked at WPP and IPG. As he sees it, agencies are struggling to simultaneously denounce the war and support their employees in Russia. But since independent media companies have paused operations in Russia or been blocked by the government, companies buying ads in the country are at least indirectly supporting Putin, he said.
"Why does it take the bombing of a maternity ward to make everyone feel the pressure on Russia? We need businesses to understand the reality of the risks of continuing to support activity in Russia today," Andreyev said.
Another agency exec wondered if networks may hesitate to pull out of Russia in light of reports that the Kremlin plans to retailate against companies moving out of the country by seizing their assets.
The stakes may be more symbolic than tangible. WPP said Russia provides 0.6% of its annual revenue; for IPG, that number is around 0.1%.
After WPP, Publicis has the largest operation among the holding companies in Russia, with around 1,000 employees at wholly-owned divisions of agencies such as Starcom and Digitas, said a former executive with direct knowledge. Publicis agency Leo Burnett has Rostelcom, Russia's largest state-owned digital services provider, as a client, according to a Yale School of Management report.
CEO Arthur Sadoun promised full 2022 salaries for the company's 350 Ukrainian staffers but has not commented publicly on its Russian operations. Spokespeople did not respond to multiple requests for comment.
One Publicis executive said they have asked in recent meetings why the company remains in Russia, arguing revenue from ad buys in the country would benefit Putin. A second exec was told by leaders that there are no such plans to withdraw at this time.
IPG execs have discussed the matter on a group chat and told leadership in recent meetings that they think IPG should walk away from Russia entirely, said one of the execs.
A third holding company, Omnicom, has Kremlin-owned clients, including Russian Agricultural Bank and Rosbank, through agencies BBDO and DDB, according to the Yale report. Omnicom did not respond to requests for comment or say what stake the company has in those agencies. Omnicom PR firm Ketchum used to have the Kremlin as a client but dropped it back in 2015.
French holding company Havas also has affiliates in Russia, and a Havas exec said they thought the company should cut ties with the affiliates while expressing concern for their employees. A spokesperson said it's up to clients to decide if they want to continue working with the Russian offices. Havas' CEO Yannick Bollore told investors this week that the company suspended plans to expand a partnership with Russian agency ADV Group.
Japan's Dentsu has Russian offices for agencies including Carat, iProspect, and Isobar and launched a Russian division in 2020 as a joint venture with Luxembourg-based VC firm OKS Group. A Dentsu spokeswoman said the company is watching the war closely but declined to detail what stake Dentsu has in the Russian offices.
"We have ceased all relations with state-owned Russian companies and are fully compliant with international sanctions on Russia," read an internal memo to all Dentsu staff on March 3.
Dentsu hasn't said if it plans to end operations completely in Russia, though, according to one exec.