WPP purchased IM2.0 through its VML operating company, which is part of the Young & Rubicam network, the person said, asking not to be identified because the transaction hasn't been announced yet. The deal is subject to regulatory approval.
China is WPP's third-largest market -- behind the U.S. and U.K. -- with revenue, including associates, of $1.4 billion and about 14,000 employees. The London-based company is spending as much as $640 million this year, buying digital-ad assets and companies in rapidly expanding markets such as Turkey, Brazil, India and Vietnam to counter slower growth in Europe and North America and capture new business from burgeoning economies.
IM2.0, which has offices in Beijing and Shanghai, creates online strategies and ad campaigns. Its clients include Dell Inc., Adidas AG, coffee maker Mondelez International Inc. and appliance manufacturer Qingdao Haier Co. It has a staff of 230 people and assets of about $33 million, the person said.
A spokesman for WPP declined to comment on the matter in an e-mail. Calls to IM2.0's offices outside normal business hours weren't answered.
WPP shares rose 0.3% in London. The stock has risen 40% this year.
The Chinese government has set 7.5% as the expansion goal for the economy this year, a rate it reached for the second quarter. The statistics bureau will publish gross domestic product figures for the third quarter this week. The economy probably expanded 7.8% from a year earlier, according to a Bloomberg survey.
With the IM2.0 purchase, WPP has bought five Chinese companies this year, including market researchers Miaozhen Systems and Sinotrust International Information & Consulting Beijing Co. Of the more than 40 acquisitions WPP made this year, 70% are in emerging markets such as Argentina, Myanmar, Bangkok and Kenya.
WPP may be displaced from atop the advertising world should a merger of the second- and third-largest ad companies, New York-based Omnicom Group and Paris-based Publicis Groupe be completed. WPP took the throne after its 2008 acquisition of Taylor Nelson Sofres.
Publicis and Omnicom announced the "merger of equals" in July, an all-stock deal that gave the combined company a market value at the time of $35 billion.
WPP forecast annual revenue growth of more than % in August. CEO Martin Sorrell said at the time that WPP would raise its target for revenue from fast-growing markets and digital operations to between 40% and 45% of total sales in the next five years, up from the 3% to 40% range previously announced.