The first business for the new agency, called AdWorks, is a worldwide assignment for the Futures Group, an internal think tank that SmithKline Beecham's Consumer Healthcare Division operates in the London borough of Ealing.
A SmithKline spokesman said the Futures Group is headed by Kim Utton, who was not available for comment.
CORE 10-MEMBER TEAM
"We've just been awarded a very large project for SmithKline Beecham, but I cannot say what categories," Ogilvy Group U.K. Chairman-CEO Paul Simons said. Ogilvy already works for Smith-Kline internationally on its consumer brands.
AdWorks will operate with a core team of 10 people, including three high-profile London ad executives who are about to break away from a leading agency, Mr. Simons said.
The group does not intend to build a traditional agency infrastructure around AdWorks, which will be driven by a core team of strategists who will operate a "virtual" agency to implement ideas.
Asked whether clients will be concerned about confidentiality if AdWorks' "virtual" agency uses Ogilvy Group resources to service clients, Mr. Simons said it depends on where the client draws the line.
If a client is concerned about protecting intellectual properties and strategies, then the new agency model can ensure confidentiality. The core AdWorks team is physically separated from Ogilvy's offices.
Rarely are clients concerned about confidentiality at the implementation level because campaigns are in the public domain, he added.
AdWorks has a second client, an unspecified financial services company. Ogilvy already works with American Express Co. internationally and with U.K.-based insurance company Royal & Sun Alliance.
If the model works, Ogilvy said it will create additional core agencies.