Based in Moscow, the new agency will be majority- owned by the VIAG group and will have as its Chairman Dmitry Abroschenko, currently chairman of the VIAG group and of its largest advertising agency VI Advertising.
VIAG brings to the deal "a combination of local expertise and international experience," says Abroschenko, who views the venture as a path to growth. Cordiant says the resources, expertise and know-how of the new agency will "deliver its clients a competitive marketing edge in Russia."
VI Advertising will remain in existence, mainly as a haven for accounts that conflict with those at the new venture and for clients who prefer to work with a truly local agency.
Abroschenko is confident that some VI Advertising clients will move their business to Bates VIAG Saatchi & Saatchi Advertising when it opens at the end of April, though none have so far said they will do so. VI Advertising, which claims billings of $27m, has predominately multinational companies on its 20-strong client list, that include Polaroid, Holsten, United Distillers and Bosch. Staff will move with the accounts they handle.
Bates Saatchi & Saatchi Advertising's 34 accounts currently include Procter & Gamble, B.A.T, Cadbury-Schweppes and CPC.
Ralston Purina is the only account in VI Advertising's portfolio that is handled by the Bates Worldwide and Saatchi & Saatchi Advertising Worldwide networks elsewhere in the world. Around five or six VI Advertising clients conflict with Bates Saatchi & Saatchi accounts in Russia, says Abroschenko, such as U.S pharmaceutical firm Lederle, which competes with Hoffman Laroche.
A Cordiant spokesman in London says the decision to tie with a local firm is unrelated to investigations into the tax affairs at Bates Saatchi & Saatchi Advertising Moscow following a raid by armed tax police on its office last November. A "couple of minor irregularities" were found which have since been resolved, he says.
Patrick Hanson- Lowe, who took up the reins as CEO in Russia this year, will be the new agency's general manager. Ivan Chimburov, currently head of VIAG's creative services, will be its executive creative director. Alexander Romanov replaces Abroschenko as general director of VI Advertising.
The VIAG Group, of which Abroschenko is chairman, also operates two small Moscow agencies Movie and LTV, plus Smart Communications, a planning and research company and promotional firm ProMart.
Copyright April 1997, Crain Communications Inc.