George Patterson : The Communications Group

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George Patterson Y&R was formed in 2005 from the acquisition by WPP of The Communications Group (TCG), formerly one of Australia's two largest marketing communications groups. TCG's main advertising business was merged with the local arm of Y&R to form GPY&R. Previously the George Patterson agency, known locally as "Patts", had been part of the Bates Worldwide network. In 2017, the Patterson name was quietly retired, with the agency adopting the new banner of simply Y&R Australia. In late 2018 it became VMLY&R Australia.

George Patterson was a pioneer of the Australian ad industry, with a reputation as a daunting and formidable figure. His was the country's first dedicated advertising agency, the first to open offices around the country, a dominant force in early Australian radio, and responsible for the first Australian television commercial. According to legend, only two people were ever allowed to call him George - local radio star Jack Davey and the chairman of Colgate-Palmolive, which was the agency's first account. To everyone else he was Mr Patterson. Patterson joined the industry in 1908 when he was appointed as advertising manager of a small machinery manufacturer. After World War I he set up his own company in Sydney and subsequently joined forces with local competitor Norman Catts to create the Catts-Patterson agency, which dominated Australia's early advertising industry during the 1920s. The partners eventually fell out, and Patterson left in 1934, acquiring a smaller rival which he renamed as George Patterson advertising. Shortly before Patterson's death in 1968, the business was acquired by US agency Ted Bates. Over the next few years the agency acquired or spun out a number of creative services shops in Australia and New Zealand, which were consolidated under the overall umbrella of The Communications Group.

The Communications Group vied for many years with rival Clemenger Communications for the position of top dog in the local industry. However, as financial difficulties spiralled at Cordiant in the early 2000s, rumours began to circulate that its Australian subsidiary would be sold. In 2003, Cordiant agreed to sell a 55% stake to investment fund Pacific Equity Partners (PEP), and its remaining 30% shareholding was subsequently inherited by WPP. Management, led by chairman Alex Hamill and CEO Ian Smith, controlled the remaining shares. However TCG's performance was dented by a number of account moves, some triggered by the closure of the Bates Worldwide network. In 2005, PEP announced plans to sell its controlling stake. An initial offer from WPP was reported to be on the low side, and was apparently topped by a bid of around A$80m from Omnicom, which also had a minority stake in arch-rival Clemenger. At the end of August 2005, WPP secured ownership of the group with an offer of A$90m. The group was absorbed into its Y&R Brands division.

However controversy soon surrounded the deal after it was alleged that PEP had made secret payments to Patts' managing director Anthony Heraghty and creative director James McGrath to prevent them leaving the business for at least a year after completion of the purchase by WPP. As a result, PEP was able to secure a higher price from WPP than it would have done had the pair not been locked in. They left shortly after expiry of the 12 month term. Discovery of the secret arrangement led to legal action by WPP against PEP, Heraghty and McGrath, which was settled with a full apology and the payment of close to A$10m in damages.

Patts suffered something of a downturn following its acquisition by WPP, losing several key accounts including market-leading VB beer, a client for more than 40 years. That loss led to several departures from the agency's creative department, and a complete shake-up of the senior management team. The agency's performance has stabilised since its late 2000s wobbles, but the agency continued to suffer a slow erosion of its client list. An important loss was the departure of GPY&R Melbourne's biggest single client, the Australian Defence Force, at the end of 2013.

The Big Won directory rankings listed GPY&R Melbourne as one of the top 20 agencies worldwide by creative awards in both 2012 and 2013. For the latter year it was also the #3 Australian agency after McCann and Leo Burnett. In 2015, it didn't make the global 20 but was the country's #2 agency by awards after Leo Burnett.

Last full revision 13th December 2016

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