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By Published on .

Two months ago, M.T. Rainey threw a party around the swimming pool of Cannes' Martinez Hotel to celebrate her most high-profile client, Richard Branson, being named Advertiser of the Year at the International Advertising Festival.

But behind the scenes, Ms. Rainey was creeping around the -Carlton Hotel holding secret meetings to finalize the sale of her six-year-old London agency Rainey Kelly Campbell Roalfe to Young & Rubicam.

"It was a bit of a farce," she said with her Scottish lilt. "We kept running into people."


The deal, announced last week, marries one of the U.K.'s most innovative agencies with the stable but less vibrant London office of Y&R, forming Rainey Kelly Campbell Roalfe/Y&R. Y&R is believed to be shelling out more than $40 million, with half payable now and the remainder linked to performance over the next four years.

"Y&R is not a hospital case, but they could do better [in the U.K.]," Ms. Rainey said. "They could use more of an engine. They're not so successful at generating domestic business."

Ms. Rainey and her partner, Jim Kelly, will be joint chief executives of the merged agency, and creative team Robert Campbell and Mark Roalfe will become co-creative directors. Toby Hoare, Y&R's current chief executive, is tipped for a prominent job within the Y&R Advertising network, and Creative Director Mike Cozens will move to the same role at Y&R Europe.

Rainey Kelly, with $100 million in annual billings, is best-known for its emphasis on payment for ideas plus a performance-related bonus. Ms. Kelly said this "more virtuous remuneration" would still be used with clients from her agency and new domestic business.

"We'll help share the learning with Y&R and maybe apply it on a network basis," she said.

Last year Rainey Kelly wrested the $60 million launch of General Motors' Astra model in Europe away from two shops owned by the Interpublic Group of Companies. That account, a major conflict with Y&R's Ford of Europe business, will now return to Interpublic's Lowe Howard-Spink in the U.K. and McCann-Erickson in the rest of Europe.

Other clients include Newscorp's The Sunday Times, local Miller distributor Scottish Courage and Allied Domecq's Tia Maria.


Ms. Rainey said the agency will keep its Virgin Group business from Richard Branson even though Y&R has international clients in the airline, soft-drink and mobile phone categories. Y&R's global United Airlines business will be handled by London-based Y&R Europe rather than by the new agency.

The 65-person agency, which starts moving into the Y&R building this week, plans to transport its open plan office, lack of departments and flat hierarchy.

"I'm going to be taking down a lot of doors," Ms. Rainey promised. "We could get

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