It has been a busy summer for lawyers and accountants at international groups such as WPP, AEGIS and Publicis, with the marketing giants snapping up digital businesses left, right and centre. But who will be next on their hitlists? Identifying three main criteria to discern an agency’s merit as an acquisition prospect, namely their profitability, their profile in the industry, and whether or not they have a strong enough management team in place to ensure successful and pain free succession, Richard Draycott, managing director of MiNetwork, which works closely with owners and directors of independent marketing services agencies, identifies 10 of the hottest digital acquisition prospects around.
Marketing giants have been snapping up digital businesses over the summer
IRISWith its HQ close to The Globe Theatre in London, Iris employs around 400 UK staff, 120 of those digital experts, and has a digital fee income of £23.7m. Launched in 1999 by Ian Milner, who also heads up the MAA, the agency is mature and Milner’s profile is up there with the best of them. The agency has an attractive client list including the Olympics (it created the mascots), adidas, Philips, Shell and Volkswagon, but it was Sony Ericsson that shrewd founder Milner built his empire upon. He built a strategic network of overseas offices following Sony Ericsson into different markets and is not afraid to make big decisions. He’s also built a solid management team around him, making Iris a highly buyable agency.SALMONWith its HQ close to The Globe Theatre in London, Iris employs around 400 UK staff, 120 of those digital experts, and has a digital fee income of £23.7m. Launched in 1999 by Ian Milner, who also heads up the MAA, the agency is mature and Milner’s profile is up there with the best of them. The agency has an attractive client list including the Olympics (it created the mascots), adidas, Philips, Shell and Volkswagon, but it was Sony Ericsson that shrewd founder Milner built his empire upon. He built a strategic network of overseas offices following Sony Ericsson into different markets and is not afraid to make big decisions. He’s also built a solid management team around him, making Iris a highly buyable agency.JAVELIN GROUPLaunched in 1997 by CEO Tony Stockil and COO Richard Wolff, Javelin employs 140 digital staff in the UK with a digital fee income in excess of £13m. The e-commerce and multi-channel retail consultancy also has offices in France and Eastern Europe (Bulgaria to be exact), an area larger networks are showing interest in. Clients include many of the best known retailers Debenhams, Lakeland, Marks & Spencer, Mothercare and Waitrose and the agency actually boasts of working with 15 of the top 20 largest retailers in the UK, which makes it sure fire target at some point in the future as retailers all continue to invest in new technologies and depend increasingly on digital experts to sell their products.ZONEFounded in 2000 and headed up by CEO James Freedman and MD Jon Davie, Zone is a full-service digital agency with experience with media, entertainment and retail brands. Key clients that deliver the agency's £5.7m digital fee income and will attract the attentions of the bigger groups include BT, Channel 4, Coca-Cola, BUPA and the National Trust. Zone is an interesting agency in as much of its team of 85 includes a large editorial team, including editors, writers, copywriters, subs, picture researchers and video producers. This expertise allows Zone to produce content for its clients across an array of platforms. The agency devises and executes integrated content strategies for Coca-Cola, BT, Channel 4, BUPA and The Economist and this USP could draw the attentions of larger groups.READING ROOMLaunched in 1996 and headed up by Margaret Manning, Reading Room employs 130 UK staff with a digital fee income of £10m, while its international network of offices includes a strong focus on Australia as well as a more recent Singapore operation where Manning spends much of her time developing the business. Clients include Skoda, LOVEFiLM, OFSTED, Trader Media Group and Teletext Holidays. Manning is clearly the face of the business and one of the industry’s few high profile female leaders, having built a business that consists of nine specialist divisions that would certainly be attractive to the larger networks.TH_NKLaunched in Newcastle a decade ago by Tarek Nseir, TH_NK has a digital fee income of £13.5m with a workforce of some 90+. Nseir has built an agency to get noticed and recently brought in MT Rainey as chairman, so he is a forward thinker and a go-getting entrepreneur. The agency is now in London and works for brands such as Sony, BBC and BlackBerry. Services include research and strategy, online marketing, creative design, UX, technical design and build and hosting and support, so TH_NK ticks all the right boxes. An Investor in People and one of only 10 companies in the UK to be members of the W3C, the agency also achieved a top-ten spot in the Deloitte Fast 50 for three years running.Profero Based in London, Profero was launched in 1998 and has a digital fee income of around £8m a year. Headed up by Dale Gall, the agency has grown into an impressive network of offices across Europe, Asia, North America and Australia. The agency is perhaps best known in the UK for its Mini and ASOS work, in particular its ASOS Marketplace site which enables fashion lovers to trade online. 2011 saw a stream of new business wins, including Smirnoff, Barclays, ASOS, HTC, Lipton Ice Tea, Western Union Global Search, Promethean and TENA, so it goes without saying that big things could be on the cards at Profero.STARTJUDGEGILLAn amalgamation of Start, which was launched in London in 1996 by Mike Curtis and Darren Whittingham, and JudgeGill, which was launched in Manchester in 1994 by Kevin Gill and David Judge, the agency has a raft of solid management in place. With some 120+ people and an annual digital fee income of £10.5m, it is very highly respected within the industry. And with offices in the UK, Hong Kong and Dubai, as well as a growing presence in Russia, it has an international client list including adidas, Barclays, M&S and Virgin Media, Virgin Mobile MEA, Dubai Airports, Qatar Airways, Chow Tai Fook, Intel and P&G. Start JudgeGill could be an attractive prospect to any of the networks, not just AEGIS or WPP.RUFUSLEONARD Founded in 1989 by CEO Neil Svenson, Rufus Leonard is an independently owned full service agency based in London and Dubai. The 90+ strong agency works with businesses and leading UK brands including Lloyds TSB, O2, John Lewis and market leading utility company British Gas, and has a digital fee income of more than £11.8m. Recent work includes the development of Google mapping technology for Transport for London and campaigns for Lloyd TSB’s London Olympics 2012 sponsorship. The agency has also continued its work with British Gas, for whom it became the lead digital agency in 2009. That Middle East office could be a big plus for the agency along with its solid structure and management team, driving the business forward under Svenson and MD Will Rowe.AGENDA21Perhaps a bit of an outsider at the moment, but since its launch in 2005 by Pete Robbins, Nick Suckley and Rhys Williams the agency has gone about carving out a solid reputation and a highly respectable digital fee income of almost £10m. A varied and broad client list includes Prudential, Epson, SportingBet.com, Investec, DFDS Seaways, Christian Aid, First Drinks and the Rugby Football Union among others. The agency is still relatively young, but all the original founders are still on board so there is a strong and ambitious management team in place.