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WPP, the world’s largest ad agency, has established a new regional hub in Manchester that will accommodate 550 employees.

The move is not so much a market expansion as a restructuring of the firm’s existing local operations.

WPP has a business model that is unusual for large enterprises as a whole but quite common in the ad industry where it competes. The firm operates hundreds of subsidiaries worldwide that each offer a different mix of advertising, website development and PR services to clients.

WPP currently has six such subsidiaries in Manchester. Their offerings range from marketing services to website development packages and ready-made business software.

Those subsidiaries will be moving into WPP’s newly inaugurated Manchester hub, which spans eight floors in a local office building. WPP also announced that two additional subsidiaries which until now didn’t have a presence in the city will send staffers to the new office.

Added up, WPP will have 550 staffers in the city across eight subsidiaries.

There are two key factors to consider when analyzing the rationale behind the move.

Manchester is the UK’s second largest and fastest growing metropolitan economy after London. As a result, it makes sense for a company like WPP to grow its local headcount in an effort to capture the revenue growth opportunities offered by the region.

The new campus launch also ties in with a previously announced plan by WPP to move 85% of its employees into large regional offices by 2025. Its new office in Manchester advances that effort.

Operating out of a single office will enable the eight WPP subsidiaries with a presence in Manchester to collaborate more efficiently on large client projects. Plus, it could cut WPP’s real-estate costs: renting a single big office is often cheaper than using multiple smaller locations on a pound-for-pound basis because the buyer has more negotiating power with which to push for discounts. 

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