LONDON: WPP Group, the marketing services conglomerate, is making Enfatico, the giant multi-disciplinary agency it created for the computer manufacturer Dell last year, into a division of Young & Rubicam Brands, according to reports.
WPP is now the biggest advertising holding company by revenue, and has previously announced plans to expand despite the downturn, but ratings agencies such as Standard & Poor's have also warned about its short-term prospects in the current climate.
Enfatico currently has 13 offices worldwide, including in London and New York, compared with around 800 agencies worldwide that Dell used prior to the consolidation of its advertising and media account.
It was intended to represent a new breed of agency, bringing together various disciplines from creative and media to PR on behalf of one major client.
At its launch, Enfatico's ceo, Torrence Boone, described it as "a next-generation agency with a diverse mix of marketing services and talent, all uniquely orchestrated to drive value for Dell."
However, the agency will now form part of Y&R, which will also have an input on the Dell account, and Boone will report to Peter Stringham, ceo of Y&R Brands, rather than WPP's chief executive, Sir Martin Sorrell.
Dell's advertising expenditure in the US fell by just under a quarter to $379.9 million (£259.5m; €289.1m) last year according to TNS, and the decision to fold Enfatico into Y&R is argued by some observers to represent a cost-cutting measure.
Enfatico also slashed around 8% of its 800 strong workforce earlier this year.
Data sourced from Wall Street Journal; additional content by WARC staff