Joint venture ad agency born
By Zhang Lu (China Daily)
Updated: 2006-06-13 15:23
Omnicom Group, the world's largest advertising and communications holding
company, is teaming up with CITIC Guo'an Group, a member of the State-owned
CITIC Group, to strengthen its presence in China's fast-growing ads
market.
The two partners will set up a joint venture advertising agency,
DDB Guo'an Communications Beijing Co Ltd, scheduled to open on July
3.
The agency will be created through the merger of DDB China under the
Omnicom Group and Beijing Guo'an Advertising Corp, a subsidiary of CITIC
Guo'an.
The US-based Omnicom will hold 52 per cent of the new venture,
while CITIC Guo'an will have the remaining 48 per cent share.
"We expect
the co-operation with Beijing Guo'an, one of the top 10 advertising companies in
China, will benefit each firm," said John Wren, president and CEO of
Omnicom.
According to Wren, the partnership reflects the approach his
company has taken in every major market to grow through co-operating with
the best local players.
While Omnicom's business in China currently
contributes a little to its global revenue, the firm believes it is a key
strategic market for its future growth.
It has taken a series of steps,
including selecting a Chinese name and opening its first group office in China
in April, to raise public awareness in the country, which is expected to become
the world's second-largest advertising market.
"We will bring our skills,
creativity, and experiences in other markets to the new venture, while our
partner will bring knowledge of the local market," Wren said.
Yan Gang,
executive vice-chairman of CITIC Guo'an and chairman of Beijing Guo'an, will be
chairman of the new venture, DDB Guo'an. He said the company is ready to share
its resources such as a cable TV network and sports advertising
channels with Omnicom in further co-operation.
The alliance between
Omnicom and CITIC Guo'an came after the latter decided to cease its 14-year
joint venture partnership with Grey Advertising, which was acquired by Omnicom's
rival WPP last year, due to an alleged snub by WPP.
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