Omnicom is to move the London offices of OMD and PHD to its Bankside headquarters as the group seeks to improve collaboration between agencies.
The relocation will mean all of Omnicom’s London media agencies will be based at one site on the South Bank for the first time.
About 650 people will be moving – roughly 350 from OMD and 300 from PHD – to Bankside, where Omnicom leases two buildings.
OMD and PHD staff will join other employees from the media division, Omnicom Media Group, including Manning Gottlieb OMD and Hearts & Science.
Each agency will have "its own distinctive and dedicated" space within the two buildings, Omnicom said.
Sources said they can accommodate the extra staff by smarter use of the existing space and dismissed suggestions that it would require flexible working to ensure there is adequate room.
Omnicom Media Group will employ about 1,700 staff in Bankside after OMD and PHD relocate in 2020.
The group hopes that the move will improve integration and collaboration with other disciplines. Bankside is also home to a number of Omnicom’s creative, CRM, branding and PR agencies, including Abbott Mead Vickers BBDO, TBWA, Proximity, Rapp, Wolff Olins, Porter Novelli and Ketchum.
The office relocation is the first significant move made by Dan Clays, who stepped up from chief executive of OMD UK to become chief executive of Omnicom Media Group UK in July.
Clays said: "As we plan for the next phase of growth at OMG, we are very excited to have all our agencies moving to one hubbed location – providing the agencies and clients with access to all the wider specialist OMG capabilities across data, digital, technology and content that reside at Bankside and also the brilliant mix of advertising and communications agencies at Bankside.
"We recognise clients will be looking to us for more integrated solutions and expecting total flexibility in agency operating models, and this move will open up exciting new opportunities for us, our clients and our people across the business in the future.
"We are fully committed to the importance of four very distinctive agency brands and uniquely thriving cultures.
"PHD and OMD have been hugely successful, growing agencies in recent years, and this move to Bankside will set them up brilliantly to continue that trajectory."
Clients are looking for more integration
The relocation is part of a wider consolidation by Omnicom Media Group, which is reducing the number of its London locations from four to two.
Omnicom Media Group, which is headed by Mike Cooper as chief executive of EMEA and Asia-Pacific, is pulling its international operations out of locations in King’s Cross and the Strand.
Staff from those offices will move to the old homes of OMD and PHD, based in two adjacent buildings, Minerva House and the Telephone Exchange, on the same street in Fitzrovia.
In keeping with tradition, OMD Worldwide will be based in OMD UK’s old base and PHD Worldwide will move to PHD UK’s former home. PHD has been in the Telephone Exchange for 26 years.
Tim Pearson, who became chief executive of OMD Group UK in July 2019 and is responsible for both OMD UK and Manning Gottlieb OMD, said it made sense for the agencies to be in one location, even though they will remain separate.
"For OMD UK, coming over to Bankside and being closer to the broader set of services and capability that Omnicom has to offer at a point when clients are looking for more integration is a significant opportunity," Pearson said.
Verica Djurdjevic, chief executive of PHD UK, said: "The rate at which PHD has grown over the past three years means that it is now time make a change to our working environment.
"The move to Bankside will not only give us access to a larger, more modern workspace and better facilities, it will also enable us to improve our client offering by giving us easier access to Omnicom’s vast range of resource and expertise."
Many big agency groups are consolidating office space
Omnicom first moved to Bankside, a former home of the Royal Bank of Scotland, in 2015, when a number of agencies, including AMV, Manning Gottlieb OMD and Proximity, left a number of locations across central London.
Some staff have been wary about moving to the South Bank, because it is several miles from the traditional, creative heart of London in Soho and Fitzrovia on the north side of the River Thames.
However, a number of creative businesses, including WPP and News UK, have also moved to the area, where attractions include Borough Market and Tate Modern.
Sources maintained that driving efficiencies has not been the primary reason for Omnicom Media Group’s UK office shake-up, although there has been a global push to save costs and boost margins.
Phil Angelastro, global chief financial officer at Omnicom, told investors at its quarterly results in October that it had made "efforts to improve efficiency throughout the organisation, particularly in the areas of real estate portfolio management, back-office services, procurement and IT services".
Many of the big, international agency groups have been consolidating their office space in London and around the world to simplify operations.
Publicis Media moved all of its UK agencies to White City in west London in spring 2019 and Havas brought all of its UK agencies under one roof in the Havas Village in King’s Cross in 2017.
Dentsu Aegis Network relocated most of its London operations to Regent’s Place in 2011 and is set to move into new offices nearby by 2022.
The UK ad market, the world’s fourth-largest, has proved resilient despite Brexit. "We really haven’t seen any negative impacts of Brexit in our businesses," Angelastro said in October.