Mellman, the chief operating officer for international specialist communications, will report to Andy Berlin, the founder of the Red Cell-owned Berlin Cameron agency in New York. Berlin becomes the network chairman. Mellman has been overseeing all WPP's specialist operations outside the US.
Daley's departure, understood to be a mutual decision, ends a period of intense speculation about his future as the leader of the Red Cell network, which he joined in December 2001.
Daley is known to have been under pressure from Sir Martin Sorrell, the WPP group chief executive, to produce significant returns on his heavy investment in WPP's fledgling fourth network.
However, Daley insisted that the decision to leave was entirely his own.
"WPP is no different to any other holding company in the setting of financial goals and Sir Martin and I have always had a strong, forthright and battle-free relationship," he said. "But the fact is Red Cell has reached the point where it has the potential to become the best creative network in the world."
Daley says that he is planning to set up an agency. "I know enough about the business to avoid the mistakes other start-ups make. I think there's a better company inside me than any I've ever worked for," he said.
Kathryn Herrick, Red Cell's chief financial officer, is also leaving the network. She is to succeed Andrew Stewart as the chief financial officer for FCB in Europe, the Middle East and Africa.
Red Cell added three strands to its network through acquisition in 2002: Les Ouvriers Du Paradis in Paris, the consultancy Headlight Vision and HHCL & Partners. It also added some of the Bates European offices, acquired when WPP bought Cordiant in 2003.