IPG Media Brands, the media division of Interpublic Group, has instructed the two agencies to work together on digital in a series of moves to strengthen both agencies through collaboration, while stopping short of a merger.
Rival agencies have restructured to focus on digital, but Initiative still outsources much of its digital work to online specialists. Universal McCann's digital operation, run by managing partner for digital Jason Carter, has handled Microsoft's UK media account since 2001 and has built up a reputation in the area.
Graham Duff, president of IPG Media Brands EMEA and president EMEA of Universal McCann, said: "For deep historical reasons, digital has not been given enough priority at Initiative."
Digital collaboration is part of a revamp designed to halt the IPG agencies' UK decline. Initiative shed £95m in billings last year, while Universal McCann lost more than £9m, according to Nielsen Media Research, continuing the slump of recent years (see box, right).
Duff said IPG Media Brands will act as a "mechanism for collaboration" that started with the two agencies moving to the same Farringdon office, the appointment of a joint financial officer and the combining of digital.
"WPP and Aegis took a long time to evolve and we've only been doing this a few weeks," he added. "I don't see the need to create a large infrastructure overhead, but if there are areas where we can invest or make acquisitions, that could be done at IPG Media Brands level."
In two years at Universal McCann, Duff has changed the leadership in almost half the agency's European markets. And at Initiative, chief executive Jerry Hill was the latest to be moved, to a global strategy role, to be replaced by former managing director Gary Birtles.
"Both brands have lost out internationally, which has impinged on their businesses," said Duff. "We need to be more competitive again, but there won't be a merger. No agency group can exist with just one agency. I want to spend less on bricks and mortar and hardware, more on people and talent."
Rival agencies have restructured to focus on digital, but Initiative still outsources much of its digital work to online specialists. Universal McCann's digital operation, run by managing partner for digital Jason Carter, has handled Microsoft's UK media account since 2001 and has built up a reputation in the area.
Graham Duff, president of IPG Media Brands EMEA and president EMEA of Universal McCann, said: "For deep historical reasons, digital has not been given enough priority at Initiative."
Digital collaboration is part of a revamp designed to halt the IPG agencies' UK decline. Initiative shed £95m in billings last year, while Universal McCann lost more than £9m, according to Nielsen Media Research, continuing the slump of recent years (see box, right).
Duff said IPG Media Brands will act as a "mechanism for collaboration" that started with the two agencies moving to the same Farringdon office, the appointment of a joint financial officer and the combining of digital."WPP and Aegis took a long time to evolve and we've only been doing this a few weeks," he added. "I don't see the need to create a large infrastructure overhead, but if there are areas where we can invest or make acquisitions, that could be done at IPG Media Brands level."
In two years at Universal McCann, Duff has changed the leadership in almost half the agency's European markets. And at Initiative, chief executive Jerry Hill was the latest to be moved, to a global strategy role, to be replaced by former managing director Gary Birtles.
"Both brands have lost out internationally, which has impinged on their businesses," said Duff. "We need to be more competitive again, but there won't be a merger. No agency group can exist with just one agency. I want to spend less on bricks and mortar and hardware, more on people and talent."
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