Advertising news in brief

WPP merges agencies

The world's second largest advertising group has combined its healthcare advertising and marketing agencies to create a single group with global reach. WPP has merged Ogilvy Healthcare business with Healthworld Communications Group, which it acquired when it bought parent company Cordiant Communications in 2003. The combined operation is to be called Ogilvy Healthworld and will have 2,000 employees in 53 offices around the world. "The fit is very good," said Margot James, president of the combined group's business in Europe. "There's very little duplication and an awful lot of filling in of gaps."

EC approves bid

The European Commission has approved WPP's bid of £0.8bn to purchase Grey Global of the US. The ruling clears the last big hurdle for the deal, which is expected to close in early March. The Commission's decision was not unexpected, but it could be significant following concerns that the combination would have too much power. The European Union regulator said it found "there were many strong competitors remaining and that therefore there was no risk that the creation of the new entity would bring about a significant impediment to competition". The WPP-Grey combination would create the world's biggest media buying operation, with combined revenues of $1.2bn in 2003.

McDonald's bins ads

McDonald's has stopped producing educational materials for the under-13s in a bid to stamp out obesity. As part of a new three-year strategy, the fast-food chain will cut back its presence in primary schools, focusing instead on enterprise, employability and work-related learning in secondary schools. Coca-Cola also follows suite, with its decision to remove branding from 4,000 vending machines in secondary schools across the UK last year.

Adspend set to rise

A new report forecasts that advertising spend for 2005 will rise by 7 per cent to £23bn, despite predictions that the economy will slow down. The Centre for Economics and Business Research's findings are based on the historic impact of general elections on adspend. An election is expected in May and Labour and the Conservatives have already started pre-election advertising. The report adds that the growth in online retail sales will force retailers to increase their advertising spend and corporate advertising budgets will rise again.