• by Joe Mandese  @mp_joemandese, November 26, 2008

WPP Group is extending its digital footprint into one of the largest and fastest growing online markets - China - and it's doing it via an alliance that will form a new online advertising network. The move is interesting for two reasons. One, it makes good on WPP chief Martin Sorrell's vow to establish more of a presence in China. Secondly, it marks yet another move by a big agency holding company to form its own advertising network, a step that could potentially disintermediate the array of third parties that dominate the space.

WPP said it was forming the new China-based ad network, ITOP 24/7 as a joint venture between WPP's 24/7 Real Media ad serving division, the China office of OgilvyOne, and Beijing-based ITOP Performance Marketing.

WPP is calling the venture will be a Chinese display and contextual advertising network, but it also describes it in a way that sounds like an online advertising exchange, noting that it, "will enable advertisers and publishers to effectively and efficiently engage their target audiences in the digital marketplace."

As part of Tuesday's announcement, WPP said ITOP 24/7 would "pioneer the shift from traditional staff-based advertising service to the use of Internet advertising platforms, creating a more cost effective and robust advertising channel."

OgilvyOne ITOP currently reaches as many as 100 million daily page views across its preexisting network of sites, and lists a roster of clients including IBM, China Unicom, Microsoft and Daphne.

The move is the latest by a major agency holding company to push deeper into the rapidly expanding world of online advertising networks, and further blurs the line between the role of third-party developers and traditional advertising agencies. In a keynote during the OMMA Ad Nets conference in New York earlier this month, Havas Digital CEO Don Epperson revealed details of a new "virtual brand network" being developed by Havas that would function as a broker acquiring and reallocating online advertising network inventory based on the fluctuating value for specific brands. He noted that such developments are blurring the line between traditional agencies and third-party network developers and said that would likely continue.

Recently, Toronto-based MDC Partners, also spun off a new media management company, Varick Media Management from its Media Kitchen and Kirshenbaum Bond + Partners units. Among other things, Varick has created a system that acts as a broker acquiring online advertising network inventory directly from exchanges and allocating, and even hedging on behalf, of specific advertisers' brands.