• by Gavin O'Malley  @mp_gavin, December 7, 2007

Loose integration and teamwork within agencies won't be enough to satisfy clients in the future, said WPP Group CEO Martin Sorrell.

Instead, fully integrated "agencies within agencies" will increasingly be created from scratch, and cater to the specific needs of clients--which is exactly what WPP is doing with its newest client, computer giant Dell.

"It's not cohesive enough," Sorrell said of a teamwork approach during remarks at the UBS Global Media & Communications Conference in New York. "There's a passionate desire on both sides [agency and client] to take another approach."

Following a seven-month review, Dell earlier this week picked WPP to oversee all its advertising and marketing spend with a budget of $1.5 billion a year. The new WPP division--developed under the code name Project DaVinci--is expected to take three to six months to complete, and will employ about 1,000 people.

"We are building a unique set of services," Sorrell said in reference to the new agency, which is promising close collaboration between researchers and advertisers with a special focus on multichannel executions.

The one agency/one brand approach is not unprecedented. TBWAChiatDay, for instance, formed the Media Arts Lab in mid-2006 to handle its Apple account exclusively.

Speaking of an increasingly digital future, Sorrell said he had just met with a large "tech" client, which had committed more than half of next year's ad budget to digital.

Also this week, Sorrell pooh-poohed the likelihood of a recession in 2008, thanks to the Summer Olympics and U.S. presidential election. WPP is particularly insulated from the dangers of a recession, said Sorrell, given that 54% of its revenue comes from less volatile marketing services like public relations.

Overall, Sorrell projected 3 to 4% organic revenue growth next year and a half-percentage-point improvement in its operating margin, to 15.5%.

Sorrell also took the opportunity this week to label Google a "threat" and a "frienemy," given the search giant's recent inroads into the agency world. All the same, Sorrell said WPP will spend $600 million with Google this year, and about $800 million next year. "We're their biggest customer," Sorrell said.