To build or to buy. That's the question exercising the majority of ad agency chief executives as they look to broaden their service portfolio.
Last week saw an example of canny construction work down at Saatchi & Saatchi’s famous Charlotte Street offices – soon to be part-demolished to make way for a new retail development. It was as though its ambitious chief executive, Magnus Djaba,
a master baker in his domestic kitchen, had substituted the icing funnel for a trowel to cement the bricks the agency is missing. Following December’s Outside Line acquisition, which plugged a gaping interactive and social media hole, Saatchis has moved to bring the Publicis agency Masius into the agency, reviving the rather faded Team Saatchi brand with a new offer.
A potent mixture of build and buy, I would say, that should ready the agency for future challenges. A few metres away, Saatchis’ Publicis stablemate Kitcatt Nohr Digitas is a creation of the "buy" approach – emanating from a deal two years ago that saw Publicis acquire Kitcatt Nohr Alexander Shaw to merge with its ailing Digitas UK outpost.
This strengthened UK DigitasLBi proposition is dependent on Kitcatt Nohr holding itself together
Last week’s global merger of Digitas with the recent Publicis acquisition LBi prompted many to ask: what next for Kitcatt Nohr? Marc Nohr, the chief executive, says it will be "business as usual" and that the 140- headcount agency will remain separate from the 600-strong LBi Shoreditch operation.
This makes sense. It allows Kitcatt Nohr, whose management team is thought to be tied into a lengthy earn-out, to retain its direct marketing/CRM credentials and to work with LBi where necessary on international opportunities.
In the past, LBi has been a proponent of the "buy" and merge model. It has tended to stick with acquired agency brands for a few months before discarding them. This may have presented cultural challenges but helped to create the appearance of a cohesive single agency brand that was ready for sale.
DigitasLBi has a reputation for the heavy-lifting, digital infrastructure work. This should complement the solid CRM offer from Kitcatt Nohr. Creative highlights may be few and far between, but its Waitrose and Starbucks work has picked up direct response awards.
This strengthened UK DigitasLBi proposition is dependent, though, on Kitcatt Nohr girding its loins and holding itself together. Looming large in the "business as usual" cited by Nohr is an attempt to retain its John Lewis Partnership CRM accounts.
Should the agency lose business, and confidence, the long-term case for a full UK merger with the acquisitive and hungry DigitasLBi could become compelling. And that’s not a word frequently used about Digitas outside its US centre of excellence.
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