NEW YORK - The acquisition of advertising agency Bates Worldwide by London-based WPP Group - whose largest global client is Ford Motor Co. - creates a host of ad account conflicts involving U.S., European and Asian automakers.
The deal was approved late last month by shareholders of Bates' previous parent, Cordiant Communications Group. The acquisition was to become official on Friday, Aug. 1.
Shortly after WPP bid for Bates last spring, WPP Group CEO Martin Sorrell visited Barcelona, Spain, to persuade Seat, Volkswagen's Spanish subsidiary, to keep its pan-European account at Bates.
Bates also works with Mercedes-Benz in Latin America.
In Asia, Bates executives say they are reassuring Chinese client Shanghai General Motors, a joint venture between GM and Shanghai Automotive Industry Corp. They say Bates will operate independently from the three WPP agencies that handle Ford's business in China.
In Korea, Bates owns 80 percent of Hyundai's former in-house agency, Diamond Bates. About 50 percent of Diamond Bates' billings are from Hyundai.
A Ford spokeswoman declined to comment on the acquisition. Ford recently agreed to a single worldwide contract with WPP, switching from regional agency contracts. In exchange, Ford said WPP's 130 companies could gain more Ford business.
In 2000, Ford had warned that Young & Rubicam could lose all of its Ford business worldwide if Publicis Groupe was to acquire the agency network.
The automaker said at that time that it expected its agencies to remain exclusive to Ford and would review relationships if that changed. Young & Rubicam was later acquired by WPP.
In the United States, Bates will be merged into WPP agency J. Walter Thompson.
In Europe and Asia, Bates is expected to align or be merged with Red Cell, the only WPP agency that does not handle Ford business. Red Cell's largest client is Fiat Auto's Alfa Romeo business unit.
Laurel Wentz writes for Advertising Age, a sister publication of Automotive News.