IPG Draft and Lowe Live direct shops to merge

Consolidation in the direct marketing sector continued this week with the merger in the UK of the Interpublic agencies Lowe Live and DraftWorldwide.

The move follows the merger of the two agencies in the US last October and Havas' recent decision to merge Ehs:realtime and Brann. The London Lowe Live operation will now be known as DraftWorldwide London, and will sit alongside Draft's Oxford and Edinburgh operations to create the UK's sixth largest direct marketing operation.

Concerns over Lowe Live's ability to build a global network and Draft's relative weakness in the UK were behind the decision to merge the operations.

Despite having a successful London agency, launched six years ago, Lowe Live was never a force in the US ahead of the Draft merger.

IPG's management, which has the clear intention of building Draft as its main global below-the-line network, hopes that the merger will help strengthen Draft's claim to be a strong network in Europe. Valerie Taylor continues in her role as the European president of DraftWorldwide.

Management changes will be minimal, with Lowe Live's managing partner team of Tony Watson, Ian Taylor and Nick Young continuing to run the London agency. Sez Maxted, the managing director of Draft's Oxford operation, will continue in her role but takes the title of managing partner at DraftWorldwide London, working closely with the London operation on group business.

The merger, which goes ahead on 1 July, creates a UK agency group with 270 staff and gross profit of £25 million. The London agency employs about 150 people with 60 in both Oxford and Edinburgh.

Client conflict as a result of the merger is minimal and management said that there would be no job losses. Lowe Live's client base is focused around the financial services, technology and automotive sectors, with key business from Saab, 3Com, Orange, CGNU and Royal Bank of Scotland.

Draft is a specialist in the FMCG area, with clients including Heinz, Scottish Courage, Purina Petcare and McVities. It also works for the Financial Times.

The expansion of DraftWorldwide UK is the first stage in IPG's review of its below-the-line operations to challenge rival networks. The future of Marketing Drive, IPG's sales promotion-led operation, is now likely to come under the microscope.

Watson said: "The main thing is the fact that the Draft network is strong and robust with 60 offices in every major city except London. This is ideal because we can provide the London powerhouse it needs."

Both Draft and Lowe Live, which was rebranded last year after being known as Lowe Direct, had relatively strong performances in 2001. Draft, the 13th ranked direct operation in the UK, grew profit by 10 per cent and Lowe Live, ranked 14th, grew profit by 12 per cent.

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