JWT Builds Technology Unit With Addition of DWP/Bates

J. Walter Thompson has folded fellow WPP Group shop DWP/Bates Technology into its tech unit in an effort to better capitalize on an anticipated uptick in the sector, the agency said last week.

The combined agency, which includes the former JWT Technology Communications Group in San Jose, Calif., will operate as J. Walter Thompson Technology, headquartered in Atlanta. It claims about $125 million in billings and a staff of 75.

DWP/Bates in Atlanta is the last U.S. shop in the Bates network to find a home under WPP ownership. The London-based holding company purchased former Bates parent Cordiant Communications Group last August.

DWP/Bates president Ridge White will take over as CEO of JWT Technology on April 1. DWP/Bates CEO Frank Donino will retire in March with the title founder chairman.

Craig Patterson remains president of the 30-person San Jose office and reports to White. JWT Technology Communications Group claimed $25 million in billings with clients such as Citrix and Mercury Interactive. The shop had a staff of 50 during the tech boom year of 1999, but is up from two years ago when it was down to 22 employees. JWT said the deal will not result in layoffs.

DWP/Bates had 40 employees and claimed billings of $100 million. Donino said billings were up about 40 percent from two years ago, largely via organic growth as clients increased spending. Its largest client is computer discount retailer CDW, which spent $20 million on advertising through September of last year, according to TNS Media Intelligence/CMR.

Donino, 65, said he spent the last four months negotiating with JWT, adding that at one point he considered buying back his agency, the former Donino White & Partners, which he had sold to CCG in mid-2000.

“Finally, we negotiated a deal that worked out better for our employees and for the company,” he said. Donino and other principals declined to describe details of the negotiations.

A source said JWT believed the tech unit would be stronger if it was bigger and had offices on both coasts. The only alternative was to fold DWP/Bates into JWT in Atlanta, “where it would wither,” the source said, citing that office’s lack of tech clients.

White said he expects tech spending to continue to go up as clients take small steps toward expanding their marketing efforts. “Before [this year], it was ‘there’s no reason for us to call,’ ” he said. “But now, clients are getting us on the calendar and finalizing budgets.”

Ad spending in the computer-software and Internet category rose 17 percent in January-September 2003 from the same period in 2002, according to TNS Media Intelligence/CMR, with Q3 spending up 25 percent.

“You’re at the end of the [software and hardware] life cycle and beyond the Y2K issues,” White said. “This year has all the makings of the right things to happen at the right time.”

Marketing analyst Kelly O’Keefe of Emergence, a branding consultancy in Richmond, Va., and Atlanta, agreed. “There’s a lot of activity in the sector as it relates to consumer technology because the players are changing,” O’Keefe said, citing examples such as Microsoft, which now competes with Nintendo and Sony in the games category.