Page 85 - Battleground The Media Volume 1 and 2

| Brand ng the Globe

ThE sPrEaD oF aDvErTising agEnCiEs
As multinational corporations extended their reach outside their national
borders, they insisted that their advertising agencies set up branch offices in all
the countries into which they expanded. The J. Walter Thompson advertising
agency opened its first overseas office in Great Britain in 1899, and by the 1950s
had 15 overseas agencies (Sivulka 1998). The Standard Oil and Coca-Cola ac-
counts took the McCann Erickson advertising agency into Europe in the 1920s.
By the 1960s, the expansion of U.S. agencies reached a peak. During this phase
of ad agency expansion overseas, the international billings of the major U.S.
advertising agencies began to outstrip the growth of their domestic billings. In
1960, some 36 American ad agencies had branches outside the United States
and operated a total of 281 overseas offices. By the 1970s, international billings
reached an annual US$1.8 billion and accounted for more almost 20 percent of
total agency U.S. billings (Firth and Mueller 2003).
Establishing overseas branches and partnerships, U.S. advertising agencies
were able both to service their multinational clients and to compete for the ac-
counts of other U.S. firms operating abroad. Later, in the 1960s and 1970s, be-
cause U.S. domestic advertising business began to level off, overseas markets
began to look even more appealing to the U.S. advertising agencies with multina-
tional aspirations. As a consequence of this overseas expansion, the international
billings of U.S. agencies with overseas operations more than doubled during the
following decade.
A second major surge in international expansion by U.S. and European ad-
vertising agencies occurred during the 1980s—a decade of megamergers in
the industry. These mergers involved a handful of large, highly profitable ad
agencies operating at the global level. In 1986, for instance, three advertising
giants—BBDO International, Doyle Dane Bernbach (DDB), and Needham
Harper Worldwide—announced a three-way merger to create the world’s larg-
est advertising firm—the Omnicom Group. Further mergers and acquisition of
agencies resulted in the creation of the British giant WPP Group. Today, four
enormous advertising conglomerates or holding companies, the Interpublic
Group, Omnicom Group, WPP Group, and Publicis Groupe SA, together con-
trol more than half the world’s ad agencies. Table B.1 groups a small sample
of the best known amongst the dozens of advertising agencies owned by these
advertising behemoths.

table B.1 Global Advertising Conglomerates and Selected Agency Holdings
interpublic omnicom wPP Publicis

McCann Erickson BBDO Worldwide J. Walter Thompson Publicis Worldwide
Lowe & Partners DDB Worldwide Ogilvy & Mather Leo Burnett
Foote, Cone & Belding TBWA Worldwide The Batey Group Saatchi & Saatchi

Source: Cappo, 2003.