WPP in Major Russian Expansion Alliance

06 April 2005

WPP Group ceo Sir Martin Sorrell has a little black book his rivals would kill for.

This platinum-bound tome of contacts is reputedly packed with the names, not only of clients, current and future, but almost every member of homo sapiens of potential use to him. One such name will be found under the 'L' tab of the tome: Lesnin, Mikhail.

It is with Lesnin, a former Soviet apparatchik, now an advisor to Russian Federation president Vladimir Putin, that Sorrell has teamed to conquer that segment of the former 'evil empire' dedicated to advertising and marketing.

Lesnin, reportedly a fixer supreme, runs a company called Video International which, belying its name, specialises in media buying and running a string of advertising agencies [WAMN: 09-Aug-04]. WPP has an unspecified stake in VI, with which it also shares a joint venture, WPP Russia.

VI will combine its Ravi advertising agency with WPP's local JWT business and the duo will also develop 141 Worldwide, an integrated marketing services agency. Crows a VI spokesman: "Creating this partnership will create a market leader in media buying and marketing in Russia."

In addition to touting for new business, the alliance will serve existing clients such as mobile telecoms operators and FMCG companies. Initially it will comprise four operating partnerships and a back office and support services business.

"It's hard to forecast any hard numbers from the deal at this stage, but it certainly looks encouraging," commented one analyst. "This is a potentially large market and going in with local partners makes sense."

But City of London and Wall Street haruspices were largely unimpressed, with WPP shares declining marginally 0.6% to £6.035 ($11.31; €8.81).

Data sourced from Financial Times Online; additional content by WARC staff