ITALY'S ARMANDO TESTA LAUNCHES NEW U.K. SHOP

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(July 11, 2001) MILAN -- Armando Testa, Italy's largest ad agency, unveiled its boldest step yet in its strategy to develop a pan-European presence with the creation of a new U.K.-based agency centered on three creatives who joined the company from London-based Abbott Mead Vickers, BBDO.

The London-based shop will be called CDD Testa, Director Marco Testa said. The initials in the name belong to Walter Campbell, Sean Doyle and David Dye, who will form the creative core of the new agency.

Though Mr. Testa declined to say how much the family-owned company will invest in the London-based initiative, he did say that CDD Testa will be 55% owned by Armando Testa, with the rest owned by a group of six that includes Messrs. Campbell, Doyle and Dye.

"While we were working on this deal we had a code name for it, 'Operation Explode,' and that's what we think it will do, explode," said David Grey, Armando Testa's London-based director of international operations. "We think this new agency will explode onto the scene in London."

Armando Testa has been trying to develop a European presence for almost three years, and starting in 1999 the company opened offices in six European cities: Paris, Brussels, London, Frankfurt, Madrid and Athens. But the bulk of the agency's billings have continued to come from its 55-year-old Italy-based operations.

That's something that could start to change in the wake of the new deal. The new agency's creative trio, while at other agencies, have worked on some of the world's best-known brands, including beer brands Guinness and Budweiser, automaker Volvo, sportswear icon Adidas, electronics giant Sony and retailer Harrods. Mr. Testa said the agency is already in talks with some of those clients to bring them under the new CDD Testa umbrella.

The strategy of hiring creative talent away from rivals as a way to gain new accounts is not a new one for Armando Testa: When Mr. Grey joined the company two years ago from Young & Rubicam, for example, he brought with him the international account from tire maker Pirelli.

But Pirelli is an Italian company that was already familiar with Armando Testa. The new agency, in contrast, will start almost from scratch, and it will do so in an economic climate in which many potential clients may be hesitant to risk working with a new agency.

CDD Testa will inherit the business from Armando Testa's U.K. operations -- which will be folded into the new agency -- but they total only around $1.5 million per year.

"We are really starting from nothing with the new agency," Mr. Testa said. "It's a bet that clients will gravitate toward quality, which is something we are obviously stressing with this new agency."

Armando Testa is obviously sold on the strategy. Agency officials said they are looking to take a similar step in other markets where Armando Testa already operates satellite offices. The next market to witness "Operation Explode," officials said, is likely to be Spain.

The first new campaign for the new agency could be unveiled as soon as September, according to Mr. Testa, and will likely be the new global campaign for Pirelli. -- Eric J. Lyman

Copyright July 2001, Crain Communications Inc.

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