Eiston Lo (University of British Columbia, BCom 2008) prepared this case under the supervision of Angela Kelleher (BCIT Instructor in Business Administration), with the close cooperation of Blast Radius and a generous grant from the British Columbia Innovation Council (BCIC). This case is intended as the basis for class discussion rather than to illustrate effective or ineffective handling of an administrative situation.

Copyright © 2008 by Angela Kelleher and BCIT. All rights reserved.




BCIC Case Study Library No. 0011B December 2008

Blast Radius – (B) Late in January 2001, the market went into a recession and by October 2002, the

NASDAQ finally reached its bottom. The dot-com bubble crash wiped out $5 trillion in market value of technology companies from March 2000 to October 2002, and was one of the largest financial catastrophes of the new millennium.

Competitors continued to struggle during this period while Blast Radius continued to grow successfully – very successfully. Revenues and profits continued to grow steadily. They opened new offices in Amsterdam, Toronto, and London, and served large clients including Nike ACG Europe, Nintendo, Heineken and Philips. Blast Radius further developed its travel and transportation industry portfolio with developments for the Canadian Tourism Commission and Air Canada’s Aeroplan. Likewise, Blast Radius’ expertise in the media and entertainment industries was augmented with strategies developed for A&E, CinemaNow and Famous Players, AOL, Esselte, and Indigo Books & Music.

Continued Growth

From 2001- 2007, Blast Radius continued to attribute its success to its core competencies in strategy, technology, and design. Below are highlights of some of their successful projects:

AOL

Blast Radius reinvented online comparison shopping for AOL’s 30 million customers and 50,000 merchants. Through reimagining and humanizing common online shopping tasks like searching and bookmarking, the new AOL shopping website resulted in over 190 media stories and unanimously positive analyst coverage that was embraced by customers and vendors alike.

To help AOL expand into the real estate market, Blast Radius helped AOL become a real estate destination of choice for key user segments with different needs, including experienced buyers, sellers, investors, and renters. Blast Radius created a real estate community that provided entertainment and encouragement coupled with useful advice and basic information.

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The new web site short-listed resources based on individual needs to help visitors gain confidence and insights. After the launch, AOL Real Estate outperformed competitive real estate portals and services from competitors such as MSN and Yahoo. The intuitive design for users was then modeled for other AOL consumer channels.

Blast Radius also helped to expand AOL’s user base by reaching out to a much younger generation of web users with AOL Kids. Blast Radius created a rich online environment for kids and aligned it to a new revenue strategy that would make it accessible and marketable to a wider audience. Blast Radius packaged huge amounts of content into over 100 uniquely visualized brand experiences, under the umbrella of a consistent, kid-friendly navigation system. The AOL Kids site was accessible on any web browser, in addition to being easily maintained by AOL. Roughly two months after launch, AOL reported that AOL Kids had exceeded their expectations.

Nintendo

For Nintendo, Blast Radius’s challenge was to build online buzz to support the launch of Nintendo’s DS mobile gaming platform. Blast Radius prepared users for the unique tactile experience of the DS touch-screen with a series of fun, interactive banner ads that challenged users to hone their “finger fitness”. These ads – all three banners in the series – were named as finalists at the 2005 Cannes Cyber Lions in the Online Advertising, Consumer Products and Services category.

BMW

Blast Radius helped to promote the launch of the 5th generation 3 series sedan – BMW’s biggest launch in the past 10 years. Blast Radius responded to the challenge by integrating online, offline, and direct mail to drive users to register and experience the car firsthand at closed-course drive events. The campaign was very successful. It attracted 10,000 new registrants, 40% of whom attended test drive events across the country.

Electronic Arts

In 2006, Blast Radius launched the new version of Electronic Arts’ most popular racing game – Need for Speed – by creating an online experience that ignites the passion of car enthusiasts. Blast Radius combined a pre-purchase promotion with a post-purchase experience that extended and enhanced game play. Innovative features included a showcase for play-customized rides, a web store selling additional cars and bundles and the ability to view and share images captured during game play. The site fuelled the growing ranks of loyal Need for Speed players by providing an engaging experience that inspired record numbers of users to sign up, visit often and participate more.

Blast Radius also helped with marketing the Madden franchise – a popular EA football simulation game that is re-released annually. Blast Radius built one of the first ever post-purchase online communities for sports-related gaming. Blast Radius integrated huge amounts of game data into the user experience, extending game play further by helping players to understand and enhance their performance. Madden players responded positively. The campaign deepened enthusiasm and loyalty among the hardcore subset of the gaming community.

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For Madden 07, Blast Radius was hired to deliver an expansive and engaging online experience to compliment the newest version of the blockbuster Madden franchise before and after purchase. Blast Radius launched the game with a completely new, highly polished identity for the Madden franchise. In addition, the launch was followed-up with a nationwide player tournament and an enriched player community where fans were able to view stats, enjoy play-by-play interactive game casts, and share and rate strategies in the “coach’s corner.” This campaign generated a significant buzz for EA and contributed to the most successful sales year in the company’s history.

Acquisition

In October 2007, Blast Radius was acquired by the WPP group of companies and aligned itself with WPP’s Wunderman network (see exhibit 1 for the related press release).

WPP

WPP, through its companies and associates, offers marketing communication services to national and global clients. As of 2008, WPP companies work with over 340 of the Fortune Global 500; over one-half of the NASDAQ 100 and over 30 of the Fortune e-50. Through acquisitions and strategic investments in companies, WPP aims to improve the Group’s understanding of the digital space and provide access for WPP companies and their clients to a portfolio of digital experts. These include1:

• 24/7 Real Media, digital marketing technology • BLUE, customer relationship management • Iconmobile, mobile marketing • Individi, addressable television • JumpTap, mobile search • Quasar, digital marketing • Schematic, interactive design • VideoEgg, online video platform • Visible World, customised video ads •

WPP summarizes its strategy as follows:

• To be the preferred provider of multinational and national communications service by adding value to clients’ business.

• To provide clients with a comprehensive and, when appropriate, integrated range of communications services of the highest quality; both strategically and tactically.

• To grow and maintain companies of such excellence that they provide the most stimulating career opportunities for talented professionals in all disciplines.

• To provide those professionals with rewards and incentives which encourage a sense of ownership.

• To enhance share owner value.

To achieve the above strategy, WPP uniquely structures and manages the group’s individual companies within a framework of eight categories. These include: advertising; 




























































1 A complete list of WPP companies is available at the WPP company website www.wpp.com.

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media investment management; information, insight, & consultancy; public relations & public affairs; branding & identity; healthcare communications; direct, digital, promotion & relationship marketing; and specialist communications (see exhibits 2, 3, and 4 for details on WPP). WPP, from a parent company’s perspective, views its role as follows:

1. To complement the professional activities of WPP group’s individual companies through initiatives and programs that:

a. Provide greater value to their clients; b. Offer competitive advantage to their companies; c. Create opportunities and rewards for their people; d. Accelerate their development in growth areas.

2. To manage talent across-the-globe, including: a. Recruitment and training; b. Property management; c. Procurement and IT; d. Knowledge sharing and practice development.

Post-Acquisition

In early November, 2007, Gurval wondered how the acquisition would impact Blast Radius’ organizational culture and core competencies. Could Blast Radius retain the autonomy it needed to stay creative and remain independent, while gaining access to WPP’s considerable resources? Would Blast Radius benefit within WPP’s structure or be at a disadvantage? Could Blast Radius align its core competencies and strategy alongside WPP’s? How could the potential issues from this organizational change be minimized?








































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Exhibit 1 – Acquisition Press Release

FOR IMMEDIATE RELEASE 24 October 2007 WPP GROUP PLC (“WPP”) WPP acquires Blast Radius WPP announces that it has acquired the business of Blast Radius (“Blast Radius”), a leading strategic interactive marketing agency, which designs, delivers and optimizes innovative, profitable, customer experiences for leading global brands. Blast Radius will be aligned with WPP's wholly-owned operating company Wunderman, the leading marketing communications network. Founded in 1997, Blast Radius is based in Vancouver with offices in San Francisco, New York, Toronto, Amsterdam and London and employs 350 people. Clients include, Nike, Starbucks and Whirlpool United Health Group. Blast Radius's revenues for the year ending 31 December 2006 were CAN$41.8 million, with gross assets at the same date of CAN$20.5 million. This acquisition continues WPP’s strategy of developing its networks in fast growing markets and sectors and strengthening its capabilities in digital media. Contact: Feona McEwan, WPP www.wpp.com +44 (0)20 7408 2204

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Exhibit 2 – WPP at a Glance (compiled from information on WPP.com2) WPP (NASDAQ:WPPGY; LSE: WPP) is one of the world's largest communications services groups made up of leading companies in: Advertising; Media Investment Management; Information, Insight & Consultancy; Public Relations & Public Affairs; Branding & Identity; Healthcare Communications; Direct, Promotion & Relationship Marketing; Specialist Communications Facts & figures Number of employees 131,000 (incl. Associates) Number of offices 2,000+ Number of countries 106 Reported revenues £6.1bn (2007) Reported billings £31.7bn (2007) Market capitalisation £7.7bn (end December 2007) Recognition & awards * Member: FTSE100, Euro FT300, Global FT500, Forbes International 500, Business Week 1000. * Member: FTSE4Good Sustainability Index. * Sir Martin Sorrell and Paul Richardson were named Best CEO and Best CFO respectively in the Media sector by Institutional Investor in 2007. * WPP's investor relations team won Best of Sector (Media) at the IR magazine UK awards in 2007. * WPP's 2006 Annual Report received two platinum awards from the League of American Communications Professionals, placing it in the top six of 2,500 entries worldwide and was awarded Best Business Annual Report by Accountancy Age. Customer Info WPP companies work with over 340 of the Fortune Global 500; over one-half of the NASDAQ 100 and over 30 of the Fortune e-50. Current clients include: Allianz, Dell, Ford, HSBC, Shell, Unilever and Vodafone. Group Companies Highlight WPP companies include JWT, Ogilvy, Y&R, Grey Group, GroupM, MindShare, Mediaedge:cia, MediaCom, Millward Brown, Research International, OgilvyOne Worldwide, Wunderman, Hill & Knowlton, Ogilvy Public Relations Worldwide, Burson-Marsteller, CommonHealth, Landor, Fitch, The Brand Union and G2.






























































2 Retrieved February 7, 2009

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Exhibit 3 – Structuring of WPP (from WPP.com3) Within WPP, clients have access to companies of all the necessary marketing and communications skills. The Group is structured as follows: Advertising Global, national and specialist advertising services from a range of top international and specialist agencies, amongst them Grey, JWT, Ogilvy & Mather, Enfatico, United Group and Y&R Media Investment Management Above- and below-the-line media planning and buying and specialist sponsorship and branded entertainment services from GroupM companies Mediacom, Mediaedge:cia, Mindshare, MAXUS and others Information, Insight & Consultancy WPP's Kantar companies, including Research International, Millward Brown, Henley Centre HeadlightVision and many other specialists in brand, consumer, media and marketplace insight, work with clients to generate and apply great insights Public Relations & Public Affairs Corporate, consumer, financial and brand-building services from PR and lobbying firms Burson-Marsteller, Cohn & Wolfe, Hill & Knowlton, Ogilvy Public Relations Worldwide and others Branding & Identity Consumer, corporate and employee branding and design services, covering identity, packaging, literature, events, training and architecture from Addison, The Brand Union, FITCH, Lambie-Nairn, Landor Associates, The Partners and others Direct, Promotion & Relationship Marketing The full range of general and specialist customer, channel, direct, field, retail, promotional and point-of-sale services from Bridge Worldwide, G2, OgilvyOne, OgilvyAction, RTC Relationship Marketing, rmg:connect, VML, Wunderman and others. Healthcare Communications CommonHealth, GHG, Ogilvy Healthworld, Sudler & Hennessy and others provide integrated healthcare marketing solutions from advertising to medical education and online marketing Specialist Communications A comprehensive range of specialist services, from custom media and multicultural marketing to event, sports, youth and entertainment marketing; corporate and business-to-business; media, technology and production services






























































3 Retrieved February 7, 2009

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Exhibit 4 – Brief History of WPP (from WPP.com4) WPP was formed in 1985 when Martin Sorrell took control of a shell company, Wire & Plastic Products PLC. It made its first acquisition in 1986, buying 10 marketing services companies by year end. In 1987, WPP bought the J. Walter Thompson Group and, in 1989, the Ogilvy Group. After financial restructuring in the early 1990s, WPP continued to develop its operations with the formation of CommonHealth, a health care communications network, in 1992. Acquisitions and operational developments continued throughout the 1990s, including the creation of Kantar , the parent company for WPP’s research businesses, and combining the media operations of O&M and JWT to form Mindshare. During 2000-2002, WPP acquired Young & Rubicam Inc. and The Tempus Group, and continued to build stakes in a number of Chinese and other Asian businesses. Cordiant Communications was acquired in 2003 and Grey Global Group in 2005. In 2007, WPP Digital was created to develop the Group’s digital capabilities. TNS, one of the world’s leading custom market research specialists, was acquired by WPP in 2008 and joined the Kantar Group. A detailed version of the timeline is available on WPP.com 































































4 Retrieved February 7, 2009