Who owns whom: Staking a claim

Mike Exon finds out who now owns whom following all the mergers and acquisition activity of 2001 within the design industry

<b>Worldwide gross income</b>
1 WPP Group $7971m (£5545)
2 Omnicom Group $6986m (£4859)
3 Interpublic Group $6595m (£4587)
4 Dentsu $3089m (£2149)
5 Havas Advertising $2757m (£1918)

Worldwide gross income

There’s never a dull moment in brandland. Growth may slow, but there are plenty of other fish to fry. The merger and acquisition activity of the networks was substantially reduced last year, though a handful of the last remaining independents did sign deals. To stay busy the big players concentrated on the housekeeping, turning their efforts inwards on re-organisation. As a result, 2001 was the year the design and branding arms of the British marketing communications networks got serious.

WPP Group subsidiary The Brand Union was beefed up to become the biggest design and branding consortium of its kind. Fellow UK conglomerate Cordiant Communications Group too unveiled its long-awaited consortium – Fitch Worldwide. Neither initiative involved any substantial new acquisition. (Cordiant bought the Lighthouse Global Network in July 2000.) The group is now reported to be suffering from the global downturn in advertising and is the subject of intense takeover speculation.

Following the long, recent run of deal-making in the design sector and the fallout in the e-business world, another trend became apparent. A number of groups opted to buy back their independence, groups such as The Open Agency (from Omnicom), The Fourth Room (from US Interactive) and Nucleus (from Swedish e-business group Adera).

The worldwide economic pressures of last year played a part in the internal change and consolidation taking place within the networks, as senior management acted to consolidate or hive off less profitable units. Networks offered some protection to consultancies, if only due to their rigorous approach to profitability. But, sadly, the headcount in brandland has dwindled.

Omnicom Group

US-based Omnicom’s principal design and branding groups are contained within its Diversified Agency Services division. These include international branding network Interbrand, Pauffley, New Solutions and its most recent acquisition and jewel in the crown, Wolff Olins, which joined the DAS division in June 2001.

What used to be Omnicom’s digital media and e-business division – Communicade – transferred its interests in 2001 into a separate new holding group called Seneca, set up in conjunction with Pegasus Partners. Seneca acquired stakes in some 15 or so interactive groups, including Organic, Oyster Partners, Red Sky Interactive, Razorfish (which closed its UK office last year) and Agency.com (of which Seneca now has full ownership).

www.omnicomgroup.com and www.dasglobal.com

Cordiant Communications Group

Following its takeover of the Lighthouse Global Network in July 2000, Britain’s CCG finally launched its branding and design network in December 2001, under the Fitch Worldwide banner.

Fitch Worldwide is essentially made up of Fitch’s international offices, plus CCG’s remaining design and branding groups. As the outposts of Bates Design in five countries have been incorporated into Fitch (and South Africa may follow soon), the consultancy now lays claim to over a dozen international offices, which are referred to by city (hence Fitch London, Fitch San Francisco, and so on).The bulk of Cordiant’s remaining design interests form the rest of Fitch Worldwide. These have been co-branded Fitch with the name as a suffix. In the UK these include PSD Fitch, BamberForsyth Fitch and DecisionShop Fitch. The network envisages eventually growing the 25 offices of Fitch Worldwide to 40.

Cordiant has a number of other outfits straddling the design camp, the most prominent being the live events group HP:ICM, which sits within the direct marketing arm 141, as well as C&FD and PCI.

www.ccgww.com and www.fitchworldwide.com

WPP Group

The year 2001 saw The Brand Union become the principal vehicle for WPP Group’s design and branding interests. Once the holding company of Lambie-Nairn and Tutssels, The Brand Union umbrella has since become parent to a vast range of design and branding groups including Addison, MCA Banner McBride, BDG McColl, Coley Porter Bell, Dovetail, Enterprise IG, Icon Brand Navigation, Oakley Young, The Clinic, Walker Group and Warwicks. While Lambie-Nairn is still in The Brand Union, Tutssels was absorbed into Enterprise IG. Other complementary groups include research unit BPRI, creative services company MJM, marketing consultancy P Four and The Henley Centre.

Enterprise IG alone has 20 offices, as well as incorporating The Identity Business of Ireland, which it acquired last July, Tutssels Enterprise IG, plus Enterprise Brand Experience. The latter arose from the merger of its previous brand expression unit Enterprise XP and BDG McColl’s retail and leisure divisions, which have also been absorbed by the group. Scott Stern Associates was also absorbed into the relaunched ad agency Red Cell.

WPP also owns Enterprise rivals Landor Associates and The Partners, which were all acquired with Young & Rubicam in May 2000. WPP’s digital division WPP.com also has a minority stake in Syzygy.

www.wpp.com and www.thebrandunion.com

The Interpublic Group of Companies

FutureBrand is US-based Interpublic’s key branding sector player with 26 offices worldwide. The group sits in the McCann-Erickson WorldGroup and enjoys a mutual partnership with the eponymous ad agency.

FutureBrand continues to integrate FutureBrand English & Pockett and FutureBrand Coleman (formerly Coleman Planet). While FutureBrand anticipates no further acquisition in the UK, mainland Europe could be a potential future target.

IPG’s remaining design and branding interests fall into the Advanced Marketing Services division. These include international live events group Jack Morton Worldwide, and Springpoint Luxon Carrà, which was merged in October 2001, following the acquisition in March of its previous owner True North Communications by IPG-owned PR group Golin Harris International.


Havas Advertising

French marketing communications group Havas Advertising reconfigured its design groups in 2001, following the decision to disband its Diversified Agencies Group. DAG’s key British design-related interests were all transferred to Arnold Worldwide Partners, Havas’ integrated communications network run from Boston. This reshuffle quietly affected Conran Design Group, AMX and EHSrealtime. Though only recently merged itself, EHSrealtime then announced it would be joining with fellow Havas direct marketing agency Brann. The creation of EHS Brann sees the end of the Realtime brand.

Havas-owned Euro RSCG Worldwide Group also benefited from the redeployment of DAG members. French group Pulp and interactive marketing business Connectworld have now joined with digital media network Circle.com.

Havas Advertising is soon set to become simply Havas, following the purchase of its original brand name back from Vivendi Universal in December 2001.



France’s Publicis has a small number of consultancies that fall under the remit of its various ad agencies. Saatchi & Saatchi and Cordiant Communications jointly own TFG, formerly The Facilities Group. TFG includes Saatchi & Saatchi Design, Sector Light Design, Red Kite New Media and others. Duffy London sits inside Publicis-owned Fallon Worldwide.

www.publicis.com and www.facilities.co.uk

Bartle Bogle Hegarty

Ad agency BBH has a 21 per cent stake in The Identica Partnership, formed from the merger of Identica and Tango Design in 1998.


Chime Communications

Smithfield Design is owned by one of Chime’s PR groups, Bell Pottinger Communications.


Incepta Group

Home of the Citigate Communications Group whose key UK design interest is the now renamed Citigate Lloyd Northover.

www.incepta.com m

Top Five Global Marketing Communications Groups, 2000

<b>Worldwide gross income </b>
1 WPP Group $7971m (£5545)
2 Omnicom Group $6986m (£4859)
3 Interpublic Group $6595m (£4587)
4 Dentsu $3089m (£2149)
5 Havas Advertising $2757m (£1918)

Worldwide gross income

Source: Advertising Age

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