WPP is merging Y&R with VML, forming VMLY&R

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WPP's new CEO Mark Read didn't take long to make his first big move: The holding company is officially merging Y&R with VML.

Jon Cook of VMLY&R.
Jon Cook of VMLY&R. Credit: Courtesy VMLY&R

VML global chief executive officer Jon Cook will lead the new agency, which will be called by an alphabet soup of letters: VMLY&R. WPP says the shop will be a "contemporary, fully integrated digital and creative offering to clients on a global scale." David Sable, former global CEO of Y&R, will continue as non-executive chairman and transition into a new role within WPP.

In a statement, Read said the new shop "will be a powerful brand experience offering and a core agency brand for WPP. VML and Y&R have distinct and complementary strengths spanning creative, technology and data services that make them a perfect match."

He added: "This is an important step as we build a new, simpler WPP that provides clients with a fully integrated offering and easy access to our wealth of talent and resources."

The combined agency will include more than 7,000 people, WPP says, and should be operating by early 2019.

Cook tells Ad Age that the merger makes sense because the agencies have been related at WPP—the holding company's structure had VML sitting within a Y&R network—and worked together for years, often sharing clients and geographies. He said the shops had complementary skills, and that leadership saw the combination of brand experience and brand advertising as a powerful one.

The move puts Y&R—a legacy shop which saw worldwide revenue drop 3 percent from $1.16 billion in 2016 to $1.13 billion in 2017, according to Ad Age Datacenter estimates—with VML, which has been a consistent star performer in the network.

Big legacy shops often get flack for being multi-layered and slow. Asked how the combined agency would stay agile, Cook said "VML is probably a lot bigger than people think" but has been able to maintain its company culture as it grew.

"We've taken a company that started in Kansas City, Missouri 25 years ago and scaled that to a global company," he says. "That gives me a ton of confidence about what it takes to scale culture and personality and agility and a client-first mindset."

"I think the world needs agencies with personality," he adds.

The tasks at hand include bringing the expanded offerings to its clients and taking the coming months to get input and figure out what's next, according to Cook. "Take our time, think through what's right, be careful, be thorough … I have really appreciated how Mark [Read] is doing that at WPP."

VML's global chief creative, Debbi Vandeven, will take on the role of global chief creative at the combined agency. VML President Eric Campbell will be the combined agency's global president. Jason Xenopoulos, who ran VML in South Africa, will lead the combined office in New York.

VMLY&R will not have a single headquarters, according to Cook, but major offices in cities like New York, London, Sao Paolo, Sydney and Kansas City. "I love the idea of VMLY&R being a mindset, not a physical building somewhere," he says.

In WPP's second quarter earnings call earlier this month, Read — who was named CEO of the holding company earlier this month, replacing Martin Sorrell — spoke about strengthening the holding company's creative agencies, saying, "We need to have stronger businesses with better work, better strategy, better reputations as well as ensure that those companies have the capabilities that they need to grow."

Kansas City, Missouri-based VML, which was founded in 1992 by John Valentine, Scott McCormick and Craig Ligibel (hence the letters), joined WPP in 2001. The shop, known for strong digital chops, saw worldwide revenue grow 3.6 percent from $390 million in 2016 to $404 million in 2017, according to Ad Age Datacenter estimates. At the Cannes Lions International Festival of Creativity last year, VML's "#NuggsForCarter" work for Wendy's scored three Lions. In addition to Wendy's, VML's clients include Kraft Heinz and the United Nations.

A year ago, VML absorbed sibling WPP agency Rockfish, a digital innovation shop with e-commerce expertise that generated $70 million in revenue in 2016, according to the Ad Age Datacenter. VML told Ad Age earlier this year it planned to put more of an emphasis on artificial intelligence, virtual reality and augmented reality in 2018.

Y&R, a stalwart among WPP's creative agencies, was founded in 1923 by John Orr Young and Raymond Rubicam, who left N.W. Ayer & Son, Philadelphia, to open their own shop. In 1980, Y&R was the world's largest agency, then went public in 1998. The agency was acquired by WPP in 2000. Among its clients are Amtrak, which was announced last week, Office Depot and computer technology company Dell.

The agencies being combined have markedly different pedigrees, says Avi Dan, founder of Avidan Strategies.

"VML's culture is midwestern and youthful—energetic, no-nonsense and friendly. Y&R is more of a gray-haired aristocrat a bit past his prime," Dan says. "By putting the two together they're hoping that the result will be like in the movie 'The Curious Case Of Benjamin Button,'" he says, referring to the film in which a man ages in reverse.

Dan, who worked at Y&R in the late 80's and early 90s, says the agency was once a shining star, with a storied history that includes bringing on George Gallup from Northwestern University to start the first advertising agency research department in 1932. "It really was a special place for a lot of us that worked there," he says.

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