Advertising agency merger aims for size

Advertising agency Singleton Ogilvy & Mather's New Zealand arm is to merge with Advertising Works in February.

The new company - Advertising Works Ogilvy - will be one of the largest advertising agencies in New Zealand.

Singleton Ogilvy & Mather was formed when Ogilvy and Mather merged with highly successful Australian adman John Singleton's agency in 1998.

Singleton, a successful racehorse owner and breeder, has been a highly influential figure in Australian politics and media for decades.

SOM's New Zealand branch is two-thirds owned by the Australian STW Group, which also owns half of Advertising Works (Adworks).

STW chief executive Russell Tate said no money was changing hands for the deal, which is due to be approved before Christmas.

He said the two companies were similarly sized and there was an advantage in blending Adworks' retail focus with SOM's international branding experience.

"The big issue for the two companies is the need to build scale and in a globalised village you either get bigger or struggle to grow."

The agency will be based in Adworks' Auckland office on Stanley St and will be headed by Adworks' owner Greg Partington.

Tate, who will be the chairman, said it was too early to say if there would be any job losses from the merger deal. There would be no conflict in terms of clients.

Adworks had a heavy retail focus with Briscoe Group and Progressive Foods as its two major clients.

SOM New Zealand specialised in brand work, with international clients including IBM, Glaxo Smith Klein and American Express.

Partington will have a 35 per cent shareholding in AWO and Singleton Ogilvy & Mather will hold 65 per cent.

SOM New Zealand has a 30 per cent shareholding in Wellington agency Redrocks, which will not be included in the merger.