WPP Takes Piece of Uniworld Pie

Deal Gives Agency African American Marketing Expertise
NEW YORK–Seeking to broaden its marketing capabilities to include the African American market, WPP Group has taken a 49 percent stake in UniWorld, the nation’s largest ethnic ad agency.
The terms were not disclosed. UniWorld, with 1999 revenues of $22 million, would fetch $33 million, at a rate of 1 1/2 times earnings. The deal came more than a year after Y&R talked with UniWorld about a possible all-cash deal [Adweek, April 12, 1999].
UniWorld founder Byron Lewis will continue as chairman and CEO of the agency, which will operate independently alongside WPP siblings J. Walter Thompson, Ogilvy & Mather and Y&R.
“It’s taken me 30 years to do what I’ve done,” said Lewis, who founded the shop in 1969. “We don’t have another 30 years to take the next step.”
Lewis said access to WPP’s media, interactive and research capabilities would enable him to
further accelerate the shop’s growth. UniWorld’s billings grew 44 percent last year, from $160 million in 1998. “For a long time, we were a small agency,” Lewis said. “We’re not a small agency anymore.”
Citing other alliances between ethnic agencies and holding companies (i.e., Don Coleman and True North), Lewis as-serted that mainstream agencies had recognized that “black urban culture has become the dominant one on American youth.”
As for why WPP pursued UniWorld, John Zweig, WPP’s CEO for branding and identity, healthcare and specialist communications businesses, said, “We always thought they were the best with regard to expertise in the African American marketing arena,” adding, “Clients and marketers now understand that targeted segments should be reached in highly targeted ways.”
UniWorld’s entry into WPP further solidifies the British holding company’s relationship with Ford Motor Co., a UniWorld client. Other shared clients include Colgate-Palmolive, Sears and AT&T.
WPP chairman and CEO Martin Sorrell could not be reached.
Reaction to the deal was positive. “It puts WPP in a stronger position in a sector of advertising services that’s growing faster than all others,” said Alan Gottesman, managing director of West End Communications.
WPP now claims the top-billing ethnic agencies in three categories: the others are Y&R’s Bravo Group, a Hispanic shop with $201 million in billings, and Y&R’s Kang & Lee, an Asian shop, at $81 million.