MSQ’s Peter Reid explains plan to ‘crack’ the US market as it unveils Elmwood acquisition

The experience has changed the way he approaches the job, ”but not always in a positive way. I’m hoping next year that I can address it.”

While remote working and the industry-wide embrace of video conferencing has helped increase productivity, he says that ”you have less of those casual conversations with people. It’s not just about demonstrating a degree of presence, but also meeting people who you don’t meet in the ordinary course of your day.”

While he’s been spending half his week in the agency’s new London headquarters, leading to “a better lifestyle ... more efficient overall,“ as he looks toward 2022 Reid plans to get back on the road and visit his MSQ colleagues in the US and China. ”I need to get out and about more and spend more time around the group,” he says, travel restrictions permitting. ”I’m still not quite sure I’m up for the two weeks’ quarantine [in China].”

Plenty of new faces have joined the firm in the last 12 months. MSQ has already made three new acquisitions this year – today the company announced its fourth. Design agency Elmwood is set to be merged with MSQ stablemate Holmes & Marchant, giving the group’s design unit a staff of 200 and offices in China, Singapore, New York and London – and a client roster including Unilever, Danone and Mars.

Explaining the buy, Reid says: “The demand for content is outpacing supply. Brands truly need to stand out in a crowded marketplace. By combining forces, we’ve created a new agency model to help companies meet this demand and ensure their branded experiences are consistent and strategic across all channels. We have a solid platform of existing clients to further build this proposition and capitalize on cross-pollination opportunities for Elmwood and more broadly for MSQ.”

According to new colleague Steve Gatfield, the executive chairman of Elmwood, the merger will create a new ”force in design.”

“Elmwood and Holmes & Marchant is a perfect fit of complementary talents, geography and opportunity. This newly forged force in design gains further power from the capabilities embedded in MSQ that will shape a uniquely relevant and contemporary approach to design as a critical part of the emerging landscape for brands new and old.”

The move brings its total headcount north of 1,000 and will boost its capabilities as it hopes to build on a bumper six months; between February and August, it saw revenues increase 30%. The firm now has 11 specialist shops including MBAStack, Brave Spark and Twentysix.

It’s been a busy time and Reid says becoming the biggest indie in Britain ”crept up on him.”

”We expected to have a pretty good year this year, though we never get complacent about it ... but if I’m honest, it’s exceeded expectations in terms of productivity and revenue growth.”

In that period, it has won business with Cancer Research UK, Visit Britain and AXA Investment Managers, and brought home five Cannes Lions. ”Across the board it’s been great,” he says.

As well as surfing the wave of client spend that lifted so many agency boats in 2021, MSQ has benefited from other opportunities amid the pandemic. It had already planned to move to new offices prior to Covid-19, but was able to take advantage of a becalmed commercial property market in 2020 and negotiate the first two years of its lease rent-free.

Although ”there were lots of reasons why it wasn’t a good thing to do,” the timing turned out to be ”perfect.”

”I was pretty clear at that time that we’re still going to need an office beyond all this, we’re still going to need to meet clients and have team meetings. You’ll need it to be more tech-enabled and you don’t need as much space as you thought you needed, but I was reasonably clear that it was still the right thing to do.”

His predictions have held out – more or less. The agency has been able to stage ”three of four quite big internal and client events in the office space,” as well as pitches and clients on-site. On the other hand, he notes meetings with both in-person and remote staff ”are the hardest thing.”

Reid acknowledges MSQ isn’t the only indie agency to have expanded significantly recently; in the UK IMA and Home merged, in Europe Dept has expanded and in the US Stagwell has been growing fast.

He says: ”I do think there’s a slightly belated thing, actually, of groups having a bit of scale but still being agile and flexible, while not trying to build yourself out as a network. I do think that’s a trend and I would see that probably continuing into next year.”

In 2022, MSQ has its sights set on expanding in Asia, and especially the US. ”It can be harder to crack, but the average client size [and fees] are larger. We’re still pretty small in the US ... but it’s more about being able to properly deliver the MSQ proposition: an agile, digital-first multidisciplinary offer.” For the company to serially compete for multi-million dollar accounts, he says it needs to scale up its teams across the pond ”and then be more credible from that international pitch opportunity.”

Finding the staff, he says, is the firm’s next big challenge. Amid rising inflation in the US and UK, and cultural changes that have rocked the recruitment market in both countries, ”you’ve still got a very tight talent market.”

”That’s probably our biggest challenge across the group, to be perfectly honest,” he says.

”What we’re trying to do over the next 12-18 months is build out this international piece that can continue to drive the growth of both agency and group.”