As the one-year anniversary of Publicis Groupe’s $530 million acquisition of digital agency Razorfish from Microsoft (NSDQ: MSFT) passes, a lingering provision of that deal is causing headaches for the ad holding company. As part of the agreement signed last year, Publicis was supposed to spend a certain amount of ad dollars across Microsoft’s search and display inventory. But with the ad recovery still tepid — and the difficulty of finding inventory that’s a good fit for clients — Publicis appears to be behind schedule in moving the targeted spending amounts to Microsoft, AdAge reports, citing unidentified sources.
The exact amount of ad spending Publicis promised to spend on Microsoft isn’t clear. But AdAge sources say that the agreement called for a number equivalent to the $286.8 million cash portion of the Razorfish sale. If Publicis can’t reach that agreed upon spending level, it could be forced to pay a penalty to Microsoft.
The magic number Publicis seems to be having trouble getting over is the $200 million mark. It’s not impossible for the agency to at least get close to the pre-set spending goals. For one thing, the third and fourth quarters are generally draw more ad dollars from marketers. Secondly, the recent deal between Publicis media shop Starcom MediaVest Group and production firm BermanBraun, which has a partnership with MSN on its Wonderwall.com and Glo.com sites, could also offer additional avenues for more spending.
In any case, the deal has driven more ad spending for Microsoft. And it remains to be seen whether Microsoft will penalize Publicis in the end, since it has become a good customer. “We are very pleased with the current state of our relationship with Publicis,” Carolyn Everson, head of Microsoft’s global ad sales, told AdAge in a statement. “Our teams are working well together… As far as we’re concerned, it’s full steam ahead.”

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