NEW YORK Looking to accelerate its development of digital capabilities, WPP Group's Young & Rubicam has forged a strategic alliance with sister digital shop VML that also gives VML a platform to become a global player.
Both shops are part of the Young & Rubicam Brands division of WPP. WPP acquired VML in 2001 and the shop became part of Y&R Brands in 2005.
The two shops have collaborated for years on mutual clients like Colgate-Palmolive and Xerox and new business pitches such as Office Depot in 2008. As such, the alliance, known as VML/Y&R, formalizes a working relationship and takes it a step further, with VML and Y&R sharing a single profit and loss center and VML CEO Matt Anthony assuming the additional Y&R role of chief global digital officer.
Anthony, 49, also has joined Y&R's worldwide board. In his new global role, he's charged with recruiting and training digital talent as well as tackling key client issues. He will also lead the rollout of VML across Y&R's offices, initially in North America but then abroad, said Y&R worldwide CEO Hamish McLennan.
Anthony becomes the new top digital executive at Y&R, with previously appointed chief digital officer Tarik Sedky focusing on North America and clients such as Accenture and Altria. Sedky, whom McLennan appointed in 2007, now reports to Anthony, who in turn reports to McLennan.
Despite the alliance, VML will maintain its own brand identity, at least at its Kansas City headquarters. That's partly owing to some client conflicts between the two shops, such as Sam's Club (VML) and Sears (Y&R).
In some ways, the partnership is an acknowledgment that Y&R wasn't going to develop its own digital capabilities fast enough to keep up with client demand. "It really does turbo-charge the offering," McLennan said of the linkup with VML. "The truth is these days, in the digital field, you can't fudge it.
"What we've got is good cultural alignment with VML," McLennan added. "We've got a global network, great clients and a huge commitment to creativity with [worldwide creative director] Tony [Granger]. And then Matt's people equally have fantastic tools, deep resources and a great knowledge of how this space works. So, when we put them both together, we feel that it gives us a huge leap forward in terms of how we go to market."
When WPP acquired VML, the shop had about 100 staffers in two offices (Kansas City and New York) that generated about $16 million in annual revenue, according to Anthony. Today, VML has about 700 staffers and estimated revenue of $125 million.
VML's sole international presence, however, is in London via affiliate shop VML/GT. Being part of Y&R will enable VML to expand its footprint to include other parts of Europe and Asia.
"My ambition, driven by clients' expectations, is to bring forward a more global offering. And then, our people want to advance their career paths along those lines as well," Anthony said. "So you look at that and then we look at Y&R, which is certainly iconic, big and very similar in terms of the way they approach client solutions, and our ambition paralleled their need.
That made it pretty easy. Then it was just a matter of, OK, let's put this together."
In New York, VML's Jim Radosevic will run the VLM/Y&R alliance in the new role of managing director. Radosevic, 47, will continue to report to Anthony.
Radosevic previously was creative director and managing director of VML's New York operation, which had a staff of about 50.