CAMPAIGN INTERACTIVE: PROFILE/WPP - Hands-on approach ensures WPP stays ahead in the high-tech arena. Gordon MacMillan reveals how WPP unites its group companies and partners to share skills and ideas

WPP Group’s purchase of two high-tech US marketing companies last month was the latest sign of its commitment to the fields of technology and interactivity.

WPP Group’s purchase of two high-tech US marketing companies last

month was the latest sign of its commitment to the fields of technology

and interactivity.



In the past 18 months, WPP has invested millions of pounds in these

areas as it pursues a three-track strategy. The two acquisitions -

Charles River Strategies and MSI Channel Research & Consulting LLC -

highlight one element of this strategy: buying companies to add to its

Specialist Communications Group. Other SCG members include Syzygy, the

UK Web development company in which WPP bought a significant minority

stake last year; Clever Media, the UK multimedia production company; the

Henley Centre, the strategic marketing company and OgilvyOne, the direct

marketing network.



The second element of this strategy involves investing minority stakes

in a range of non-core businesses, with a view to sharing skills.

Notable among these have been investments in HotWired, the online

business of the digital media magazine, Wired, and Peapod, the US

home-shopping grocery operation. WPP is also a founding sponsor of the

MIT Media Lab project, Digital Life.



Another part of this strategic element is the formation of a

multi-company venture capital fund that specialises in providing seed

and early round finance to high-tech companies. Some of MT Ventures’

early investments have been important ones, such as NetChannel, the main

competitor in the US to Microsoft’s WebTV, and Protozoa, an

award-winning developer of 3D animation for the Web.



The third strand of WPP’s strategy focuses on evolving existing skills

within the group. Its ad agency networks, Ogilvy & Mather and J. Walter

Thompson, have developed strong new-media credentials, as have its

international media and PR networks, MindShare and Hill & Knowlton. The

greatest strides, however, have been made by OgilvyOne, whose key

client, IBM, has demanded that the agency be at the leading edge of

interactivity.



Eric Salama, WPP’s strategy director, says: ’OgilvyOne has developed

superb Web capabilities - a result of working with companies like

IBM.



It’s a natural step for the agency as interactivity is an important part

of the evolution of direct marketing.’



Behind the three-pronged strategy is a belief in the future of two

growth areas: e-commerce and one-to-one relationships. ’While it is

possible to go forward just by building a corporate Website, that cannot

transform a business. But having transactions through that Website and

forming one-to-one relationships can,’ Salama says.



These twin faiths guide WPP’s acquisition and investment strategy.

Salama does not believe WPP should be buying or investing in companies

only to leave them to sink or swim. Nor is it enough that they simply

happen to be new-media agencies per se.



By inference, Salama contrasts WPP’s approach to that of its rival,

Omnicom, which has bought about half a dozen new-media agencies,

including Agency.com, Online Magic and Eagle River Interactive. Its

hands-off approach has not pleased everyone - both Eagle River

Interactive and Agency.com have reportedly been seeking a closer

relationship with their holding company that lets them take advantage of

group synergies.



Salama says: ’We are investing selectively to understand how these new

forms of communication can transform business. Some of that execution

will be creative and some will be database and direct marketing

oriented.



When we have it, we want to provide a platform to bring it

together.’



WPP already brings it together through a series of new-media workshops

where people from different group companies working on interactive

projects share insights. Another way is through its group-wide intranet

site, which carries the latest research and allows staff to share

ideas.



WPP unites its partners and group companies for specific projects. Its

investment in HotWired led to a commission for its Internet-related

research operation, Millward Brown Interactive, to produce

ground-breaking research into ads on the Net.



With its wholly owned operating companies, partners and clients all

working together, the ever expanding WPP Group’s motto is clear: ’Keep

it in the family.’ Ultimately, however, clients call the shots and,

Salama stresses, it is their emerging business needs that drive all

WPP’s investments.



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