WPP PLC is merging its well-known creative agency Young & Rubicam with its digital- ad firm VML, part of the advertising giant's efforts to deal with digital disruption across the industry.
The company said the combined business would be called VMLY&R, employ 7,000 people and be led by Jon Cook, who is currently VML's global chief executive. David Sable, Y&R's global CEO, will be nonexecutive chairman and transition to a new role within WPP.
The combined business will have annual revenue of more than $1 billion, according to a person familiar with the matter. The move is part of new WPP Chief Executive Mark Read's plan to offer a simpler structure for clients who want more integration across marketing functions such as data, digital, creative advertising and media buying.
Mr. Read has also said he aims to revive sales growth at WPP's creative firms, like Y&R, in part by making them work more closely with the company's stable of digital-advertising and data-science firms. Mr. Read has said he would unveil a full strategy update by the end of the year.
“This is an important step as we build a new, simpler WPP,” Mr. Read said. “VML and Y&R have distinct and complementary strengths spanning creative, technology and data services.”
WPP acquired Young & Rubicam as part of a broader $4.7 billion deal in 2000. The New York-based firm has been credited with some of TV's most popular ads, including a recent remake of a 1977 spot for Xerox about a monk who finds a way to quickly make copies of a handwritten manuscript.
VML is one of WPP's best performing businesses with a compound annual growth rate of 22% between 2014 and 2017, according to analysts at Kepler Cheuvreux, a broker.
BY NICK KOSTOV