The new direct marketing arm of international advertising group Ogilvy & Mather, OgilvyOne, recently announced it would vacate central London in favour of consolidated premises in the Dock-lands district at Canary Wharf.

In making the decision, the company said it had concluded that changes in the industry are so far-reaching that it can no longer accomplish its strategic goals in the type of premises which abound in the West End of London and are home to much of the UK's advertising industry.

Moreover, advertising industry executives say, the move is indicative of the pressures on agencies world-wide, which are increasingly shifting from traditional midtown office space to big box-type accommodation at its fringes.

Paul Simons, managing director at Ogilvy & Mather in London, says the reasons for the move are simple: the business strategy could no longer be effected through staff located at disparate West End offices. The background, Mr Simons says, lies in the company's two core businesses, one of which is the traditional advertising agency. The other, OgilvyOne, is an arm formed to capture the growing demand from clients for direct marketing and communication services alongside traditional advertising.

The explosion in cable television, digital television and Internet access has opened up far more channels of communication. Alongside terrestrial television, cable may offer 30 channels, some of which are as widely watched as are main channels. This has made television viewing audiences more diffuse and less predictable, while digital television has made interactive services possible. Meanwhile, the Net offers a whole new way of reaching consumers.

"This has led to an O&M initiative for greater integration between the various forms of media," Mr Simons explains, adding that his firm, a division of WPP Group, is hardly unique.

Increasingly, he says, the lines between, say, print ad copywriters and broadcast media writers, are artificial. "What the client wants to see is all the creative people together in one group," he explains. Because companies want to communicate with customers with a single message, there is little point in separating those who create that message into increasingly artificial distinctions based on the medium used to deliver it.

Also, new businesses such as brand development and public relations are being added to advertising agencies. Indeed, the OgilvyOne division, which includes all these new businesses, is now the same size as the traditional ad agency business.

These new groups simply cannot produce the services clients want without working closely together, he says. "All the evidence is, the industry suggests, that if you keep people in separate buildings, the integration between them is less good," Mr Simons says. "You have a much greater chance of different disciplines working together if you put them in the same place." Others in the advertising industry note that the move to larger, open space is hardly particular to London. In New York, the focus of the advertising industry has moved from its traditional midtown home on Madison and Sixth Avenues to below 34th Street around Park Avenue South, extending down to SoHo.

"The problem is that midtown offices are expensive and they can't be gutted and converted to big open spaces," one advertising executive notes. The older buildings in lower Manhattan, however, are ideal, he says.

TBWA/Chiat/Day, a Los Angeles ad agency, has moved from the city's downtown district, to a purpose-built warehouse designed by architect Frank Gehry, the Binocular Building, in Venice Beach. But the company's expansion required still larger premises, and, in an effort to promote creativity, it commissioned a new building in the Playa Vista area at the fringes of Los Angeles. The company describes its new building as "The Studio Under the Cliff Dwellings", in which it attempts to recreate the effect of a small city, with various departments and services connected through a "main street".

"We live and die by our ideas," a Chiat/Day spokesman says. "We can't force creativity but we can create an environment which encourages it to happen." Premises such as those built by Chiat/Day are simply not available in large numbers in central Los Angeles, midtown Manhattan or in London's West End.

"Not only is it hard to find a building of more than 50,000 sq. ft in the West End of London," Mr Simons says, "when you do find one, they are all vertical." Warehouse-type buildings with big floor-plates are simply not available in the area, it is that, more than any other factor, he says, which pushed the company out to Canary Wharf.

However, as much as new technology is forcing physical integration of parts of the advertising industry, so too is it making it possible to integrate without relocating.

Mr Simons is convinced that the integration of communications business in the advertising industry would not have been possible had the right accommodation not been available.