27th September 2013
One of the great (and most striking) things about being in this business – marketing communications – is just how diverse it has become. Had Green Square been in existence 20 years ago, we’d have almost entirely been advising ad agencies, with the odd direct and experiential shop thrown in.
Looking over the Green Square Deal Monitor for 2013 earlier this week, I was – and this isn’t too strong a word – staggered by the sheer variety of businesses that have changed hands or merged over the past nine months.
As well as the expected advertising, PR, experiential and digital businesses, other targets for M&A activity have included channel marketers, public affairs lobbyists, design shops, search agencies, data shops, sales promotion specialists, and many others.
The businesses doing the buying have become more diverse too. So, while we expect the likes of WPP and Publicis, as well as their smaller or more localised equivalents, to go shopping on a regular basis, one doesn’t expect the likes of newspaper distributor and aviation services group John Menzies, or print group St Ives, to go around snapping up marcomms companies. But this is precisely what they’ve been doing as they seek to diversify away from their core businesses, which many feel have only a limited future.
Just last week, St Ives launched a retail marketing specialist business, The Shop, which aims to help brands transform advertising into effective in-store executions. This standalone creative business offers integrated services much earlier in the planning process, including shopper marketing, retail design, permanent display and brand activation. This is only the latest chapter in St Ives’ expansion of its services; since June 2010, it has bought data specialist Occam for £12m, as well as digital agencies Response One, Incite, Forward Thinking and Amaze, as well as search specialist Branded3 Search.
So what is this telling us? Well, apart from making our job more interesting and varied, I think in this digital age, it’s all about the blurring of lines, and convergence. Marketing communications no longer means just one thing, or a group of siloed disciplines operating under a common agency banner. While the great creative idea retains its importance, in this new, always-on, interconnected age, messages have to reach people at the right time, in the right place, and when they’re at their most receptive.
To do this, agencies (and newcomers to our industry) are increasingly having to embrace new, often strange disciplines. A couple of recent examples leaped out at me from my trawl through the Deal Monitor. A couple of months ago, the Cicero Group, a London based group specialising in integrated comms in the crisis management, public affairs, corporate PR and government relations, got into bed with Yatterbox, an online political monitoring specialist. The resulting entity, Cicero Yatterbox, is attempting to bring a new political social media venture to market. It’s an interesting and, in today’s day and age, a potentially very big idea – as debates shift from Parliament and the newspapers into the online space, the ability to track and provide companies and brands with analysis of policymakers’ conversations could be a real money-spinner.
And earlier this month, Editions Publishing, the UK’s leading (only?) content marketing agency in the financial services sector, was bought by Communisis plc, the customer communications specialist. Basically Editions creates “engaging content” for investors, analysts and the like. Instead of employing creatives, it makes use of skilled specialist writers and journalists. Communisis does a similar thing, but its specialties are design and print (as well as DM and data). The acquirer paid about £7m in cash and shares, which is quite a lot of money for what is a rather niche business. But it could in the end turn out to be very good value for money – this is a case of bringing in a specialist skill makes absolute sense. It certainly fits in with Communisis’ oft-stated strategy of acquiring specialist businesses in areas complementary to its own.
Then there was the acquisition, at the start of September, by Bunzl of UK-based TFS (The Fulfilment Store) for an undisclosed sum. Bunzl is an international outsourcing and distribution company, listed on the London Stock Exchange, with a long, chequered history – it started off back in 1854 as a haberdasher in Bratislava! TFS is based in Rugby and specialises in the procurement and fulfilment of promotional products and marketing point-of-sale materials for customers in the UK across various market sectors. Revenue for the year ended 31 December 2012 was £8m.
Now this at first glance might seem an odd coming-together; but when you consider that TFS also specialises in stock management, picking and packing, then it starts to make good sense.
Finally, a fortnight ago, Toronto-based Cinram shelled out $US47m to buy multi-platform video services specialist Saffron Digital from HTC. Cinram is one of the world’s leading distributors of DVDs and Blu-rays, but it also provides a wide range of services for the entertainment industries. As distribution of films, games and music moves from physical discs to digital downloads, it makes sense – even at such a high price – for Cinram to acquire a firm which is skilled at distributing content onto smartphones and tablets.
The four acquisitions I’ve just mentioned are worthy of note because they indicate where marketing communications are going – which, in short, is everywhere. Point-of-sale leaflets, prospectuses, distribution (be it by lorry or internet) and telling your clients what consumers and politicians are saying about them on social media sites are all in the marketing mix now, and may become as important as the blockbuster TV ad or eye-catching poster.
And it’s not just the likes of W+K, McCann, MediaCom and DDB who will share the marketing pie between them – CMOs and others who hold the marketing budgets will increasingly have to decide how much to give to the new entrants across all the emerging marketing touchpoints. Already we’ve seen how important data is becoming, and how it’s making inroads into “traditional” agencies and how new players are using it to leverage a share of marketing budgets.
Many will not like the changes, some will lament the passing of the era of Bernbach, Gossage and Ogilvy. But the same old skills – creativity, insights, analysis and the ability to bring ideas to fruition – will still be needed, by both established players and new entrants. Interesting times ahead.