WPP's Maerov: Acquiring Schematic Was Vital To Winning Dell, AT&T

Schematic was one of the agencies that WPP snapped up during its 2007 digital media-buying spree. According to Lance Maerov, senior vice president, corporate development for WPP, the acquisition was a key factor in the holding company's pickups of AT&T's roughly $3 billion media planning and buying business (via Mediaedge:cia) and Dell's $4.5 billion overall account late last year.

"Schematic was central in WPP's win for both of those accounts," Maerov said, speaking to attendees at the AlwaysOn OnMedia NYC conference on Tuesday. Maerov said that the decision to leverage Schematic during the pitch process came directly from WPP CEO Sir Martin Sorrell and Mark Reed, CEO of WPP Digital (the holding company's digital arm). "The deal closed in September and then we got right into the AT&T pitch, so they put a tremendous amount of trust in Trevor and the Schematic team," Maerov said, referencing Trevor Kaufman, the CEO of Los Angeles-based Schematic.

According to Kaufman, part of the success stemmed from Schematic's ability to complement the core pitch agencies with design and technology solutions, in addition to creative and strategic insights. "Dell and AT&T are both companies who aren't just broadcasting messages to clients using digital media, they're offering services and value to clients through the digital channel," Kaufman said. "They needed a bit more than just 'online advertising,' and that is the approach we wanted to bring to the pitch processes."

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"It's no secret that we're in an industry which is changing rapidly, and M&A activity is core to the execution of our strategy for retooling the agency model," Maerov said. "Acquiring high-value companies with the digital capabilities that our clients expect us to support them with is how we build the agency for the next millennium."

WPP acquired or made substantial investments in no less than 70 companies worldwide in 2007--and Maerov said that we shouldn't expect anything less (if not more) this year, even with an economic downturn. "Maybe the private equity guys won't show up at auctions and drive prices up, but we'll still be there. We're not going to slow down at all," Maerov said. "We're very focused on North America, but we're also looking to accumulate more assets in the BRIC (Brazil, Russia, India and China) countries. And year-to-date, we haven't seen clients pull back from budgets."

As a mainstay in WPP's M&A department, Maerov sat at the table during the negotiations of deals like the purchase of Schematic, Refinery, Blast Radius, and of course, the $649 million 24/7 Real Media buy, so it's no surprise that his bullishness about the holding company's plans for 2008 echo statements made by Sorrell.

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