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Western marcomms’ march to the far (and very near) east continues ever on

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By Tony Walford, Founder

November 15, 2013 | 7 min read

Back in the 19th and early 20th centuries, as the vastness of America was being opened up, it was always assumed that to seek out new opportunities, one had to “go west”.

This week we look at an interesting deal in Hong Kong

Whether you were an emigrant escaping European pogroms and poverty, beckoned by the Statue of Liberty, or a hardy frontiersman keen to seek his fortune in the untamed “wild” west, the eastern hemisphere represented the “old world”, while the western represented newness, freedom and possibility.

How things have changed! Barely 30 years ago China was a drowsy giant, still groggy from the insanities of the Great Leap Forward and the Cultural Revolution: the idea that it would become the fastest-growing economy in the history of capitalism would have been absurd back in 1980. But over the past 10 to 15 years, in a kind of marcomms mirroring of the 19th century “Scramble for Africa”, western companies have been engaged in a race to build bridgeheads in China and its neighbours, or to snap up fast-growing Chinese firms. Marcomms groups, notably WPP, were among the very first to start sniffing round the Far East.

We have written about this many times of course, and the idea of the global ad industry being centred around Madison Avenue and the streets of Soho and Fitzrovia – indeed the idea of such as thing as “the global ad industry” – now seems charmingly quaint. Most people in our industry know that the best growth opportunities lie in the Asia-Pacific region - dominated by China and its 1.3 billion citizens.

It amazes me that there are still tasty prospects there for the big fish of London and New York to gobble up, and this week has proved no exception.

College Group – a multi-national PR group with origins in the financial PR specialist College Hill – last week announced the acquisition of The PR People Consultancy (PRPC). PRPC is an award-winning agency providing corporate communications and brand reputation expertise. Vitruvian Partners, the private equity group which has a significant investment in College, declined to disclose how much the deal was worth.

However PRPC has offices in Hong Kong, Shanghai and Beijing and thus is something of a player in the region. Its clients include China Light & Power. The acquirer says the “strategic partnership” will enhance its capabilities in supporting global clients in Greater China, thus making College an attractive prospect for big firms who require public relations and corporate comms expertise in the area.

Uhi Hui, who founded PR people in 2004, will be staying to provide his expertise and becomes a managing partner of College Group; he’ll also join the firm’s Global Corporate Practice Board. PRPC will work alongside, and in partnership with, College Hill’s existing financial, corporate and IR communications business in Hong Kong.

College already has a presence in Hong Kong, represented by a 25-strong College Hill Asia office led by Anne Pang, but PRPC has a presence on the mainland and is close to the business and administrative centres in China.

This area of PR is an interesting one. Although well established in Europe and North America, it’s a relatively underdeveloped discipline in China, one that I feel will grow in importance as China’s media sector expands and more businesses seek to enhance their presence with the Chinese public and government. This will mean seeking lobbying and consultancy expertise.

This particular deal has been described as a “win-win situation” by Hui. It gives the acquirer a bridgehead in China as well as allowing PRPC the opportunity to flex its muscles and display its expertise in a global arena. It’s also an indication of College Group’s ambitions since Vitruvian’s investment two years ago: in September it opened an office in Dubai, which will be supplemented by satellite operations in Abu Dhabi, Riyadh, Doha and Manama. College is, I think, yet another hungry young outfit to keep an eye on.

Staying with PR, and staying with the east (but not so far east), I was interested to learn last week that MWW, one of the top five independent PR agencies in the US, had just acquired Parys Communications, a UK (which is, after all, to the east of America!) consumer and B2B shop whose clients include mobile operator Three, BBC Worldwide and News UK, the publisher formerly known as News International. Launched in 2004, it will now be rebranded as MWW.

MWW offers clients – who include the likes of McDonald’s, Nikon and Subaru – a mix of media relations, consumer marketing and PR, corporate communications, public affairs and investor relations services.

Parys is its first acquisition and is, says MWW founder and majority shareholder, the first step in an international expansion programme that will involve opening at least three to four offices by the end of 2014.

Kempner, who is a well-known figure on the US PR scene and a high-profile longtime Democratic fundraiser, says Parys’ "entrepreneurial, aggressive and nice" culture as a "challenger brand" matched that of his agency.

Payment is in a mix of cash and MWW shares to Parys directors Patrick Herridge (founder and MD), Rebecca Blinston-Jones, Anthony D’Alton and Robert Mitchell. The amount was not disclosed. Herridge, the founder and MD, will remain in charge as UK MD of MWW and all eight Parys employees will remain with the agency.

It’s an interesting deal that will allow MWW to provide clients with UK services and then work with the Parys team to “expand rapidly but smartly in London – it’s our goal to be one of the dominant mid size agencies in the UK".

What’s really heartening about this particular deal is that it’s a vote of confidence in London: Kempner is on record as saying that the city is "the capital of Europe" and a strong location from which to oversee further expansion. It’s also an acknowledgement of the expertise and talent to be found here, and a refreshing counter to the perception that the UK is a mature or even declining market in which profits can only be extracted via cost-cutting or outsourcing.

And it’s great to see an independent – MWW was sold to IPG in 2000 before being bought back as an independent agency three years ago – brimming with brio and ambition. Kempner is already talking about expansion into Europe (using Parys as a base camp) and then Asia and the Middle East.

Looks like we’re going to have plenty to comment on in the coming year!

Tony Walford is a partner at Green Square, corporate finance advisors to the media and marketing sector.

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