Friday, July 06, 2007

WPP's G2 Grabs Refinery

WPP's G2 Grabs Refinery

by Gavin O'Malley, Friday, Jul 6, 2007 6:00 AM ET

source: Media Post

IN AN IRONIC TWIST ON this week's theme of American independence, WPP Group's G2 Worldwide has acquired Refinery -- one of the few remaining independent digital agencies in North America. Headquartered near that most "liberated" of U.S. cities, Philadelphia, the 12-year-old Refinery generated revenue of $21 million last year. With a staff of 79, its clients include Merck, Campbell's, Merrill Lynch and Amgen. The shop will now be integrated with G2's North American business unit, G2 Interactive, operating under the leadership of president John Paulson.

Refinery is the latest in a string of acquisitions for G2, which specializes in digital communications, direct marketing, shopper marketing and design. Last month, it acquired Star Echo, a China-based agency offering activation marketing throughout that region. Other recent grabs include MDS Boole, a data and metrics consultancy in Spain.

Rather than expanding for expansion's sake, however, Refinery offers G2 specific technical expertise, particularly in the area of search engine marketing. (Refinery owes its strength in SEM to its acquisition of Philadelphia-based search engine marketing firm directMASS in 2005.)

"In today's market, it is not enough to excel at strategy and creative....We have to be able to deliver the goods in technology, analytics and operational excellence too," Joe Celia, chairman and CEO, G2 Worldwide, said in a statement.

Industrywide, independent ad agencies have become a rare breed. Publicis Groupe arguably sounded the death knell in December with its agreement to buy online and direct marketing shop Digitas. And this year, in response to Google's plan to buy DoubleClick, Microsoft agreed to take Avenue A/Razorfish off the market with its planned acquisition of aQuantive.

Remaining heavies include AKQA, Wieden+Kennedy and imc2 -- all privately held --along with the publicly traded Sapient, followed by a slew of smaller shops, including Glow Interactive, IQ Interactive, i33 Communications, Slingshot, and Greater Than One.

In this increasingly digital age, interactive agencies have also attracted non-traditional suitors. Earlier this year, for example, magazine publisher Meredith acquired Genex, a top 50 interactive shop, along with New Media Strategies, a firm specializing in online social media and word-of-mouth marketing strategies.

This year, G2 has expanded its client roster with digital wins in North America from Campbell's and Canon; Visa for the Olympics in Asia; and additional assignments in Europe and Latin America from longtime client The Coca-Cola Company.

With 86 offices in 42 countries around the world, G2's other clients include The Absolut Spirits Company, Adobe, The Coca-Cola Company, GlaxoSmithKline, Kodak, Kraft, Mars, Nokia, Pfizer, Procter & Gamble and Volkswagen.

Behind only Aegis Group, WPP's GroupM Interaction is the second-largest digital network holding company--with 1,224 digital staffers worldwide, 619 of whom are stationed stateside--according to agency billings researcher RECMA.

Gavin O'Malley can be reached at

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