With Article 50 recently triggered and negotiations on how the UK leaves the European Union in the early stages, the answer to the question of how UK business will continue to trade with nations on the continent still seems a way off.
But one ambitious agency group that shows no sign of slowing its European ambitions is Toronto-based digital marketing agency DAC Group, which entered the European marketplace in 2015 through the acquisition of London agency Make It Rain and Edinburgh-based agency Ambergreen, which it acquired a year later.
Former Mediacom UK managing director David Jowett was appointed as president of DAC Group Europe in 2015 to spearhead DAC’s charge into Europe and his remit moving forward is to spot new opportunities in Europe to further build the DAC agency network while simultaneously spreading the agency’s ‘digital at the local level transforms businesses results’ philosophy.
“We are going to play the game that we can see when it comes to Europe and Brexit,” says Jowett. “With regards to what happens to the United Kingdom from here on in we have kind of covered both bases with multiple office locations, but Brexit was not the reason for that. To try to guess exactly what it all means is virtually impossible. We will make smart, nimble decisions at the appropriate junctures on what the best way forward is for us without getting too distracted by what is happening politically. What is going to help us win in our European plan is ultimately ourselves, but if Brexit does restrict the movement of talent then I suppose we still have deep talent pools in the USA and Canada to draw on, so there are still different levers for talent to move around within our business.”
Interviewing Jowett in London’s Soho House it quickly becomes apparent that DAC’s journey in recent years mirrors that of The Drum in many ways. Launched around four decades ago as a very traditional print-based business - for many years DAC bought and placed ads in Canada’s Yellow Pages – DAC was originally very focused on serving local markets and helping brands and businesses win at a local level.
In the late Nineties DAC was acquired from its original founder by experienced ad and marketing man Norm Hagarty, right around the time that print businesses like DAC (and The Drum) were being impacted by the move towards digital communications. Hagarty ultimately faced the conundrum of how to transform his telephone directory print business into a digital business relevant to modern brands and one which offered DAC a viable long-term future. However, while Hagarty recognised that a total transformation was vital for survival, he was not prepared to leave DAC’s DNA behind, as Jowett explains:
“Ten years ago we were still 90% print-based, but now DAC is around 95% digital. Norm is a marketing guy through and through, but he is also very entrepreneurial. He took DAC on a journey from a being a print business to a digital and technology business and to make that type of fundamental change to a business takes intensity, determination, commitment, and guts.
“As a Yellow Pages business we always believed that local marketing was very important. Our DNA has always been to help every brand or store win locally. Twenty years ago that was done by placing ads in a printed book, but now that happens by creating and placing ads all over the internet. How we do things has changed, but we are still helping each store win one at a time. We have the same DNA – connecting brands with buyers at a local level – which, if you look at what Google, Facebook, Twitter and so on are doing, is becoming increasingly important.”
Investment in new tech
Building new technology platforms capable of delivering big brand messages locally has been core to DAC’s transformation in recent years. That has seen the agency’s development team swell from a single lonesome software engineer eight years ago to a team of 80 developers today based in the agency’s Toronto HQ.
So, despite political and economic uncertainty sweeping across the UK and Europe, why have Hagarty and Jowett chosen now to expand the agency so far from ‘home’.
Jowett says: “We got to the point a few years ago where the business transformation was really flowing in North America and as entrepreneurs often do Norm thought ‘what next?’ Our local philosophy had some great traction in the US and Canada, so it made sense to think about taking our model to Europe. It was the next natural step for us. Clients are thinking multi-market and our technology can work across countries, so why wouldn’t we go on that journey to see what we can achieve in partnership with those brands.”
Following the London and Edinburgh acquisitions Jowett has rapidly accelerated DAC’s growth across the continent, acquiring Ad-x media in Munich and Dresden, Germany, and also launching a new DAC office in France, and launching a new Joint Venture in Spain this month.
"Setting up from cold is very hard, but setting up with established talent you believe in and clients already on board gives you a much faster start and you can get your technology into play quicker,” says Jowett. “Our goal was to bring our philosophy and technology into the UK through the acquisition of Make It Rain, which was the first proof point that we could actually bring the DAC philosophy and technology into a new country and prove that winning at a local level was still very powerful for brands. We are now on the cusp of announcing a series of joint ventures in Europe, so we can fill in the gaps from Southern to Northern Europe.”
So, what does DAC look for in a potential agency acquisition?
He says: “The sweet spot for us is an agency that is sophisticated enough to embrace and adopt what we can do for them, but not so big that they struggle to execute that pivot to local. To try to convince a 100-person agency for instance, to change its entire DNA is difficult and you could die trying.
“We look for agencies that who care about helping brands win in what is considered a different way. Most agencies aim to help a brand succeed nationally. To create the infrastructure, technology, philosophy and processes to help organisations win at every location, and therefore nationally, is like looking at things through the other end of the telescope. We are looking up at the world from an ‘each store’ location, not down on the world thinking this is how we will do PPC for a one dimensional UK or whatever it is. That is fundamentally what we look for in the people we do deals with. We are looking for a real DNA fit and their ability to embrace DAC’s philosophy and what we are all about.”
“Most holding company acquisitions are ‘acquire/earn out/former owners leave’ and then the agency is dropped into the larger business. That is not what we are about, this is not a scale play. We are not trying to be WPP. This is about trying to create a network of like-minded individuals and clients that we can deliver transformational value for.”
So, with North America established and Europe now well on track, what does the future hold for DAC Group?
“Who knows, Norm has amazing vision and drive” says Jowett, “but being honest there is still so much opportunity here in Europe. When I was younger I used to have a five-year plan, but now it feels futile to have a plan any further than the end of this year. We have a direction of travel and the specificities are that this year is about enthusing those European offices with everything that is being wildly successful in North America. A lot of that is about educating the local market as the digital local space in the UK is maturing quickly. It was really nascent a few years ago, but we have more conversations with businesses where they are starting to care about digital local. They cared about it then but they had so many other things that were mission critical to them to sort out. Now it is rising up the agenda, so we need to take advantage of this.”
With a UK General Election now looming there could be more new political philosophies to adapt to later this year, but that looks set not to deter DAC Group from spreading its ‘digital at the local level transforms businesses’ philosophy even further afield in the years ahead.