US firm wins 2012 marketing contract over British rival

Matthew Beard12 April 2012

American marketing giant McCann Erickson has defeated its British rival WPP Group to win the prestigious contract to promote the London Olympics.

The New York-based company will handle London 2012's advertising, promotion, public relations and digital communications in what is the biggest marketing project in British history.

The win by McCann Erickson, whose parent company is the New York-based marketing concern Interpublic Group, is set to be announced shortly in what will be a blow to WPP's chief executive Sir Martin Sorrell.

Sir Martin, an active backer of the London campaign, and who travelled to Singapore with the bid team in 2005, had been hoping his firm's British background would clinch the deal.

Sources quoted in the Financial Times said that Sir Martin lost out to McCann Erickson because WPP was unwilling to split the tender for marketing from the tender for market research, which is being awarded separately.

The London 2012 tender is unusual in that, far from being paid a lucrative fee for its work, bidders were invited to say how much they were prepared to work for free to market the Games.

McCann Erickson will pay about £10million in services-in-kind, in return for which it becomes an official sponsor of the Games. Some marketing experts say that this factor deterred some other major agencies from pitching for the tender.

Industry insiders also said that WPP's in-kind offer fell well short of its rival's bid. WPP's defeat is further bad news for Sir Martin, following Tuesday's figures from the marketing services group showing a decline of nearly six per cent in first-quarter revenues.

The chief executive said he did not expect an upturn in advertising and marketing budgets this year. McCann Erickson will take over the account currently held by Chime Communications, which held a one-year contract for London 2012's marketing in the run-up to the handover ceremony at the Beijing Olympics. McCann Erickson's UK arm is behind the American Airlines television advertisement campaign featuring Kevin Spacey.

It is part of McCann Erickson Worldwide, Interpublic's largest subsidiary, which last year agreed to pay £12million to the Securities and Exchange Commission in a settlement against charges of accounting fraud.

The London 2012 organising committee said it never commented on sponsorship deals until they are completed. McCann Erickson declined to comment.

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