New York-based advertising agency Young & Rubicam Brands Inc. has reorganized its Irvine office to focus on the Internet.
The office now operates solely as Wunderman, Y&R’s unit that handles online ad work. It now oversees digital work being done at the agency’s San Francisco office.
As part of the reorganization, the local office gave up oversight of traditional advertising work done by Y&R, with that going to the San Francisco office.
The Y&R side in Irvine has done work for El Segundo-based Mattel Inc., Jenny Craig Inc. of Carlsbad and McClean, Va.-based Hilton Worldwide.
Work on those accounts still is done in Irvine but now is overseen by San Francisco.
Irvine Y&R workers now report to John Berg, current western region managing director for Y&R, operating out of the Y&R San Francisco office.
“Very little has changed,” said Dan Olson, former managing director for the Irvine office and now western region managing director for Wunderman. “No one has changed positions or lost any business.”
Olson now oversees Wunderman’s operations in Irvine and San Francisco.
He picked up oversight of two big Bay Area accounts: San Francisco-based Blue Shield of California Life & Health Insurance Co. and Invisalign, a dental braces maker that’s part of Santa Clara-based Align Technology Inc.
The move reflects the growth of Internet ad work at the Irvine office. In recent years, Wunderman has brought work to Irvine, while the Y&R side has continued to shed big automotive accounts.
Before the reorganization, Wunderman made up nearly 80% of the office’s capitalized billings, a measure of revenue for ad agencies. That was up from 30% a few years ago.
The Irvine office had $210 million in capitalized billings last year, down 43% from a year earlier, in part due to losses on the Y&R side.
Wunderman in Irvine does work for Dallas-based Southwest Airlines Co.’s rewards program, New York-based Accenture Interactive, part of Dublin, Ireland-based Accenture PLC, Irvine-based Toshiba America Information Systems Inc.’s digital music players and laptops, Irvine-based Autobytel Inc. and Rosemead-based Southern California Edison Co., part of Edison International.
Y&R, part of Britain’s WPP Group PLC, opened the Irvine office in 1998 to handle Ford Motor Co.’s Lincoln Mercury account. It later took the lead on Ford’s European brands, nearly all of which since have been sold off.
Last year, Y&R Irvine lost its $110 million Land Rover account to the agency’s New York office after Ford sold the British brand to India’s Tata Motors Ltd in 2008.
Along with Y&R’s Chicago office, the Irvine office now is fighting to keep creative ad duties on the $5 million yearly Hilton account, which was landed in 2005.
The account includes corporate branding and work on Hilton’s honors program.
The shift in Irvine comes as market trackers project companies will spend more this year on Internet marketing than on print for the first time ever.
Companies are expected to spend $119.6 billion on online and other digital work compared to $111.5 billion on newspaper and magazine ads, according to a study by the Bay Area’s Outsell Inc.
Olson served as a managing director of Wunderman until 2006, when he was promoted to chief operating officer of the Irvine office.
He took the top spot at the agency after former Y&R managing director Rick Eiserman left in 2008 to run Hollywood-based marketing agency Trailer Park Inc.
The Irvine office had been an odd mix, according to Olson. It operated as both Y&R and Wunderman with no distinction between the two agencies. It was the only office within WPP to operate that way, he said.
The office also houses WPP media buying agency MediaEdge.
Olson said it’s unlikely but not impossible for Wunderman to ever compete against Y&R for work.
“We have pitched against our San Francisco office in the past, but we’d probably align before we competed against each other,” he said.
