Embracing the dragon: What the Trio Digital acquisition means to Aegis and Isobar
Everyone thinks they want to do business in China. Of course they do – it’s the world’s biggest consumer market, with unprecedented economic growth over the past three decades, and an expanding and aspirant middle class with cash to spare; and of course Chinese consumers have a thing about Western brands, particularly the upmarket ones.
The Trio Isobar team
Yet – and we’ve written about this in The Drum before – the difficulties of doing business in China should not be underestimated: there are all manner of political (this is particularly pertinent in the digital space), cultural and linguistic niceties to overcome.
That’s why so many of the big holding companies – WPP and Publicis foremost among them – have entered the market by buying up local Chinese agencies over the past few years. They serve as useful bridgeheads from which to expand: you have a team on the ground that understands the consumers, politicians, language and culture.
Aegis, following its takeover by Japanese giant Dentsu, has been doing the same. Its acquisition of Chinese digital agency Trio (for an undisclosed sum) earlier this week appears to be one of its biggest and most important – for all sorts of reasons.
The 120-strong Trio, led by the chief executive and executive creative director, Chris Chen, is one of China’s top digital independents, with many awards and an impressive client book.
The Shanghai-based agency has more than 10 years’ history in China, with its founder Chen having lived in the country since 2002. Its top five clients are mostly local (but big): Haier, Ping An Bank, Wei Chuan, and Zespri; with pharma giant Abbott its biggest multinational client.
As well as its staff, with their knowledge and experience in and of the region, Trio’s other great asset is its very strong capabilities in mobile and 3D. The growth of multi-screens is arguably even greater in the Asia-Pacific region than it is in the West, and Trio has a strong track record in creating integrated but “channel neutral” work. It also has a high proportion of female staff, including at senior level – as China’s women become more independent, and more economically powerful, this could prove to be an ace up Aegis’ sleeve.
Trio will, with immediate effect, become part of Aegis’ Isobar unit and rebrand itself as Trio Isobar. Senior management look like staying, which is another plus – so Chen will continue as CEO and ECD, supported by April Chang, the general manager, and Britney Pai, the deputy general manager.
The addition of Trio will make Isobar one of the largest digital marketing agency networks, with more than 700 digital specialists in China.
But for me, the acquisition is about more than just being big in the region and snapping up one of China’s best, and best-thought-of, hotshops.
Jean Lin, the CEO of Isobar Asia Pacific said: "Our Isobar strategy is ‘embracing the Dragon'. We believe having a robust China operation and capabilities will help multinational clients drive their businesses in Asia-Pacific.
"Isobar’s full-service digital focus and scope also allows us to connect with clients across Aegis Media in China and provide increased capabilities across the network."
This means that Isobar (which already has a pretty strong reputation in China) can attract new, global clients looking to market to Chinese consumers, as well as growing Aegis’ business with existing clients elsewhere in the world.
I expect to be commenting on a number of similar transactions in the coming months, but what of the Chinese agencies stepping out of their market and heading West? A topic for another time perhaps.
Barry Dudley is a partner at Green Square, corporate finance advisors to the media and marketing sector.