NEW YORK WPP Group is setting up an offshore digital production arm as a shared resource to build Web assets for its agencies.
Called Deliver, the unit will use WPP's capabilities in Asia, Eastern Europe, Latin America and South Africa to build Web site wire frames and resize banner ads in cheap labor markets. It has about 700 employees, WPP said.
WPP has poached Digitas executive Neal Prescott, 49, to lead the effort. At Digitas, he was global head of technology enablement.
"Clients are doing more online, and their budgets generally aren't increasing," said Prescott, who spent four years at Digitas. "It often doesn't make sense to do all of the digital production in the local area. That's not to say you shouldn't do any. An awful lot of it can be done offshore, cost effectively and at higher quality."
WPP is following in the footsteps of rival Publicis Groupe, which in May 2007 set up a digital production unit called Prodigious Worldwide. The group was split off from Digitas and is headed by Corey Torrence. It is now part of VivaKi, a group Publicis set up to manage its digital assets.
Deliver's capabilities will remain part of the respective agencies, but it
Will build a common platform to match shops with production assets. Wherever possible, teams will work in the similar time zones, Prescott said.
"It's not IT outsourcing," he said. "There's a higher level of collaboration required of the teams because of the creative nature of the work."
Many digital agencies already have offshore production capabilities. For instance, WPP's Schematic has staff in Costa Rica and Studiocom has personnel in Colombia. Deliver will draw on the production capabilities of several other WPP shops, including Ogilvy, Zaaz, Agenda in China and Aqua in South Africa.
"By choosing to utilize Deliver, our agencies will be able to offer clients the best way to do work online at the best possible cost," WPP Digital CEO Mark Read said in a statement.
Deliver is part of WPP Digital, the unit the holding company has set up to manage its investments in 10 new media startups as well as house interactive companies that are used as a shared resource by WPP agencies. That includes 24/7 Real Media, India Web shop Quesar, Blue in Singapore and Schematic.
The idea is to use economies of scale to benefit a broad range of WPP shops with a distributed model. Low-cost production is rising in importance, as shops need to create dozens of creative iterations.