Mergers and Acquisitions Content Marketing John Brown Media

Why the Dentsu Aegis John Brown Media deal is a game-changer


By Tony Walford, Founder

May 20, 2015 | 8 min read

One of the most intriguing snippets of news to have emerged in the last few days was the story that John Brown Media had been snapped up by the Dentsu Aegis Network.

Staying on: John Brown Media CEO Andrew Hirsch

Why is it so interesting? Because it will help Dentsu Aegis fulfil its ambition of establishing itself outside of its Japanese heartland. And act as a wake-up call to rivals.

First, let’s start with John Brown Media. Even if you haven’t heard of this West London-based company, you’ll know its products, which include Waitrose Kitchen, as well as print and digital magazines for the likes of Virgin, John Lewis, Chelsea FC, RBS and Vue cinemas.

The company began life back in the 1980s, when the eponymous John Brown, then working for Virgin Books, had a brainwave – shaking up what was then known as “customer publishing”. Brown, so the story goes, was appalled at the quality of in-flight magazines. They were dull – full of ego-boosting messages from CEOs – poorly-written and badly designed, reading more like a corporate brochure than a proper magazine.

Just because, Brown reasoned, the magazines were free, and their audience was in effect a captive one, that was no excuse for a shoddy product. Airline magazines ought to be entertaining, informative and well-designed – so much so, in fact, that they could compete with, or exceed, the standards to be found on newsstand magazines. With this insight, and an approach to Richard Branson, who apparently loved the idea, Virgin’s Hot Air in-flight magazine was born in early 1987. It was this – along with Brown’s deal to publish an irreverent adult comic from Newcastle (Viz) – that built the John Brown Publishing empire.

Over the next decade and a half, the company became a byword for high-quality customer mags, and even launched some newsstand titles. In 2001, it bought competitor Citrus Publishing, and the company itself was bought out by its management in 2004. Since then it has grown, successfully made the transition to digital and now employs 250 people at offices in London, Hong Kong, Dubai and South Africa, producing around 100 print mags and catalogues, as well as apps, for around 50 blue-chip clients.

Having bought and subscribed to many of the company’s products in the past, I can categorically state that this company knows how to produce high-quality, engaging content. Creating content is something that agencies have struggled with – but John Brown, and other leading customer publishing (or, as they are known, content marketing) companies like Cedar, Redwood et al, have always been able to do this because their mags and apps are created by journalists; and editorial types have always been good at knowing what readers want to read.

Creating engaging content that pleases readers and clients is a difficult trick to pull off, but it’s potentially a very lucrative field to get into.

It’s always puzzled me, for instance, why a direct agency as good as OgilvyOne (whose lifeblood, after all, is talking to consumers on a one-to-one basis) has never launched a customer magazine division (although Ogilvy as a network has made efforts to create a content marketing offer, with mixed results).

In fact the only big agency I can think of which has really had a serious stab at content marketing is Publicis Blueprint, which has been successful for the past 15 or 16 years; however, last month it lost its biggest (and founding) client Asda, so the company may struggle to reassert itself.

This move would seem to indicate that Dentsu Aegis is planting its flag to assert its serious intent in the field of content.

Although the amount paid has not been revealed, I believe it’s a fantastic deal for both companies. John Brown will get access to both some huge brands and the input of creative types from the network, as well as serious investment.

And Dentsu Aegis? Well, it gets an outfit that is close to being best-in-class in its field, one that will help differentiate it from its competitors and helping it to position itself as a true “one stop shop”. John Brown will sit within the network’s media and performance offer, but will retain its senior management (CEO Andrew Hirsch will report to Tracy De Groose, CEO, Dentsu Aegis Network UK & Ireland) and its own brand identity.

But the other reason I think it’s significant, for both Dentsu Aegis and the industry as a whole, goes back to a piece I wrote for The Drum back in February about how today’s Mad Men needed to rediscover the lost art of storytelling.

In today’s world, media is increasingly being 'earned' or 'owned' as opposed to just being bought (thus making the job of the media agency more complex). If content really is king, agencies need to find the people best able to create high-quality content. JBM now has 25 years’ experience in doing just that – and doesn’t just do mags and apps, it’s also in digital publishing, content management, website strategy and film production.

It’s interesting, also, that Hirsch will be working with Ben Wood, global president of iProspect; the latter specialises in search and performance – given that search engines are now much smarter than they were a decade ago, and that crisp, well-written copy and cleverly-tagged images will get you higher up the results table than just stuffing copy full of keywords, it makes sense.

Indeed, Wood’s comments to the media last week were telling. He said: “The digital communications market has seen some major shifts as the focus for communications strategy evolves from the world of bought media, to one where earned and owned media often play the lead strategic role.

“Successful search campaigns are increasingly reliant on the ability to drive audiences towards quality, editorialised content. By aligning publishing into our search and performance offering, iProspect creates real differentiation. The John Brown Media acquisition proves we are committed to a future that is driven by content, and brings us more depth in this space.”

Get past the business speak and he’s actually saying something important. Companies like iProspect have always been dominated by techies, data types, hard-negotiating sales people and analysts. What they’ve never been really good at is creating engaging content, or telling engaging stories. John Brown has always been good at creating great mags and is stuffed full of experienced content creators but doesn’t have the data or analytics capabilities that its clients would like.

Now two good operations have been put together, and they complement each other perfectly (and other parts of the sprawling Dentsu Aegis empire, the media agencies like Carat and Vizeum especially, would of course benefit from John Brown’s abilities with content). The offer is now quite something.

Dentsu Aegis probably needs to make just one more acquisition and it'll have something truly compelling. Given that video is fast becoming the most powerful marketing tool of all, if Dentsu were to acquire an experienced video content agency to complement John Brown’s print and digital offer, it could be on to something big: it really would be able to offer that much-sought-after “one stop” solution.

And the crucial question is, what will Dentsu’s competitors, WPP, Publicis and the rest, think? Already commentators have been saying that they will have to make similar swoops if they are not to fall behind. While I doubt that messers Levy, Sorrell and Wren will be panicking just yet, I am sure that we will see a rash of M&A acquisitions in this space in the coming months.

But they will need to act quickly and decisively. Agencies have, as I alluded to earlier, been slow to pick up on branded content; and they won’t be acting alone. Publishing giants like Time, Bauer, Condé Nast and Hearst (which is, at the time of writing, rumoured to have picked up the Asda business that Publicis Blueprint lost) will also be sniffing around to pick up branded content firms. This, coupled with the threat from the tech behemoths and big consultancies, means that the 'traditional' agency networks could be fighting a war on three fronts.

Interesting times ahead.

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

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