Mr. McLennan, 40, succeeds Ann Fudge in that role. Last year, Ms. Fudge, a former Kraft Foods marketer who joined the agency in 2003, said she would relinquish day-to-day control of the ad agency, following a tough stint that included client losses such as Sony's Sony Electronics and Ford Motor Co.'s Jaguar.
Ms. Fudge remains chairman-CEO of Young & Rubicam Brands, a WPP Group-owned unit that includes Wunderman and Burson-Marsteller.
Describing Mr. McLennan as a "rising star at the agency," Ms. Fudge said in a statement: "He has an outstanding track record in the business and I am delighted to have him as my partner at Y&R Advertising."
The appointment, which follows a lengthy search, ends one of the most popular ad-industry parlor games: guessing who will be the one to reinvent Y&R.
Mr. McLennan will be charged with helping to turn around a Madison Avenue giant-it has 163 agencies in 81 countries-that's fallen on hard times in recent years. In his previous post, Mr. McLennan managed more than a dozen companies in the Australia region, quadrupling revenue over the past four years.
In an interview, he gave a list of priorities, including new business, focusing on creative and working on Y&R's digital offering.
Improving creative work
"Y&R has enormous strengths and has built an incredible brand over the decades," said Mr. McLennan. "We really need to focus on improving the [creative] work and think through our interactive business. By a couple years' time, I want people to say that we have the greatest collection of talent in the business."
Mr. McLennan, who hails from Sydney, Australia, joined Y&R in 2002 after 17 years at George Patterson Bates. In 2005, he managed Y&R's merger with Patterson Bates.
While at Patterson Bates, he toiled in every area of the agency and in both its Sydney and Hong Kong offices. In 1999, he was named national managing director of the agency.
Mr. McLennan said he and his family plan to relocate to New York this summer.