"This is not a Ford directive" to co-locate J. Walter Thompson, Young & Rubicam Brands and Ogilvy & Mather in the same Dearborn building, said a spokeswoman at the carmaker. WPP "felt they should do it to better serve the client."
The agencies' back-room service departments, likely to include finance, human resources and production, will also be consolidated in Dearborn, according to four executives close to the matter. The Ford spokeswoman said she's unsure which of the agencies' operations would be combined, but said "there are efficiencies to be had." Added benefits, she said, are "richer communication" among the Ford shops and easier travel for meetings.
WPP has made similar moves in other cities, albeit not for single clients. In Seattle, the local office of Y&R is in the same building as JWT, Berlin Cameron & Partners/Red Cell and Landor Associates. WPP plans to move the Chicago offices of its agencies to the same building, according to an executive close to the situation, who likened the co-locations to "a food court of WPP agencies."
Ford is WPP's biggest client worldwide and the two inked a pact last year that strengthened their ties. The automaker said then it expected cost savings via the global optimization of WPP's resources in exchange for giving WPP the chance to win more of its business. But WPP is only combining agency offices in Detroit for Ford, not in other parts of the world, the automaker's spokeswoman said.
Although the agency holding company has encouraged its networks to "play nice" with each other in regard to Ford's U.S. accounts, there has been friction, the same executive said. A second agency executive admitted there had been friction, but said there's "now there's total collaboration" among the shops.
Executives from the three agencies weren't available for comment. Satesh Korde, president of WPP's Ford Motor Group, was also unavailable.
JWT, Detroit handles Ford Division's U.S. account, backed in 2003 by $768 million in measured media, according to TNS Media Intelligence/CMR. Y&R, Dearborn, and its Wunderman unit have Lincoln and Mercury, which CMR reports spent a combined $260 million last year. Ford's Quality Care parts and services, handled by Ogilvy, Dearborn, received $26 million in measured media in 2003.
Y&R, Irvine, Calif., handles Ford-owned Jaguar and Land Rover brands, based there. That Y&R office apparently isn't part of the consolidation. But talk of Ford moving the brands back to Detroit hasn't stopped swirling since Lincoln and Mercury returned last year. Ford has continued to deny it plans to move the brands to Dearborn.
Ford is in the midst of a revitalization plan it announced in early 2002 aimed at pretax profits of $7 billion by 2005 after it lost a stunning $5 billion in 2001. The automaker said its revival plan is ahead of schedule. Last week, it raised its second-quarter earnings predictions by 15¢ a share to 45¢ to 50¢, excluding special items. Ford's first-quarter results of $1.9 billion in net income exceeded the marketer's earlier estimates.