Interpublic denies plans to merge its two UK agencies

by Arif Durrani, Media Week 09-Sep-08, 07:30

LONDON - Agency network Interpublic Group has denied that it plans to merge its two UK media agencies Initiative and Universal McCann following the former's loss of its flagship £75m Orange media planning and buying account last week.

From November, Initiative will be sharing offices with Universal McCann, and the loss of another high-profile account has led to further speculation that the UK agencies will merge.

Doubts also surround the future of Initiative's flagship Tesco account after a week when the IPG agency lost Orange and said goodbye to global strategic development director Jerry Hill and president EMEA Dirk Wiedenmann following an internal restructure that is set to continue this week.

But Richard Beaven, chief executive, worldwide, Initiative, said: "IPG has said from the outset that it is committed to building and strengthening its two media brands, Initiative and Universal McCann. This remains the case. We are undertaking restructuring across Initiative as part of an ongoing plan to ensure we have the right resources in place to meet future challenges and to succeed as our industry continues to transform."

It is understood that WPP media powerhouse MediaCom is aggressively pursuing the Tesco account as it does not currently have a large supermarket chain on its client roster.

One bright spot for Initiative was the awarding of the £1m media planning and buying business for Savanna Cider without a pitch. Launched in the UK in 2006 by South African producer Distell, the cider drink has recruited the agency to handle its first major brand campaign, which is set to launch before Christmas.

Ads created by DraftFCB will target 20 to 34-year-olds as the company attempts to increase its share of the premium cider market, currently dominated by Bulmers and Magners.

UK chief executive Gary Birtles believes it can help the agency regain its winning ways. "The first half of the year started very brightly for us, with four new business wins in quick succession," he said. "The loss of Orange was bitterly disappointing, but we need to pick ourselves up and move forward. Developing an exciting new drinks range like Savanna is a good place to start."

Other accounts won this year include Hertz (£10m), Match.com (£8m), Gossard (£5m) and the Science Museum (£1m).