Owens DDB appoints managing director from world of telecoms and hints at plans to go solo

Mr Derek Handley, former marketing director of Digifone, is to move to Owens DDB as managing director.

Mr Eddie O'Mahony, the advertising agency's current managing director, will stay on as chairman and he has hinted that the next move for the agency could be a total buyout by their global affiliate DDB.

"We're not flying the flag for independence," said Mr O'Mahony, referring to the agency's position as one of the last remaining Irish-owned agencies.

"DDB has always said it would would be interested in taking equity in the company and we have always replied that we could be interested when the time is right."

He added that the market was moving away from independently owned agencies.

The terms under which Mr Handley agreed to the job offer from Owens is not known but it is likely that it involved being given a stake in the company, which is owned by its nine board members.

Mr O'Mahony, who has been managing director for the past 10 years, is the largest shareholder with a 32 per cent stake in the company.

The agency client list includes O2, McDonalds, and Volkswagen, and turnover for 2001 was €27 million.

The relationship between Owens (formerly known as Peter Owens) and the global multinational DDB goes back to the early 1980s, when several affiliation deals were struck between multinational agencies and local Irish agencies.

These loose "handshake" deals, which did not involve any equity or even money changing hands, are now very much out of favour with multinational groups, which prefer buyouts such as last month's buyout of Cawley Nea by TBWA.

"I know that this is a tough business I'm getting into," says Mr Handley, who has been with his present employers for eight years and through its name changes from Esat Digifone to Digifone to 02.

Until November of last year he was marketing director of 02 but during the rebranding he moved to product director. The 35-year-old marketing executive was previously with CTT and Telecom Éireann.

His move to Owens DDB means his former employer will now be a client. Owens DDB has been O2's advertising agency since 1998, although Mr Handley will not work on that account.

"I don't really feel it would be appropriate to work on the account," he says, adding that part of his new job will be to expand the services offered by the agency.

"There are several generic issues facing advertising right now," says Mr Handley. "For an agency in Ireland, the globalisation of accounts means that it is vitally important for an agency to have a mix of global and local business."

Agencies are increasingly at the mercy of international brand alignments and Owens DDB has had direct experience of this when one of its largest clients, Cadbury, moved to the Helme Partnership due to an international agency change.

"The economy itself is of course the biggest factor affecting advertising," he says.

"People are definitely more careful about how they spend their money."

The announcement this week by Sir Martin Sorrell that profits for the first half of the year at his WPP group fell by 30 per cent to €270.85 million signalled yet again that the recovery in the marketing communications industry is not yet in sight.

Pronouncements by Sir Martin, who presides over the world's largest agency holding company, are regarded as industry bellwethers and he now says the recovery in the industry will not take place until 2004, when it will be driven by the factors such as the US presidential election and the Athens Olympics.

The worst declines for WPP - which owns Young & Rubicam, Ogilvy & Mather and J Walter Thomson - came in the US market and in its public relations divisions, where there was an 11.2 per cent decline in profits.

A statement from WPP said: "Stock market declines in the past few months have heightened concerns about corporate profitability and consumer confidence and have raised the possibility of an economic double-dip."