At the turn of the last century, the advertising industry was dominated and controlled by Wpp, Publicis, IPG and the gold standard - Omnicom. Wpp had developed the subcontinent and owned India. IPG was rising in China. And Omnicom dominated Europe and Brazil. Then came MDC – a Canadian maverick-led firm who bought CPB and a host of independent creative firms. For the most part, the extraordinary success of CPG raised the water in the tub and MDC has done well.
A few weeks back Naked, the UK-based media planning company was bought by an Australian company. Australian? Yup…an unheard of Australian marketing services group called Photon in a deal worth an initial £16.5m.
Naked founder Will Collin said he "had deliberately avoided making a deal with one of the top-tier global marketing companies such as WPP, or private equity firms to try to reach an agreement with a like-minded firm. "Photon has a swashbuckling style," Collin added. "They are quite maverick and want to shake up the marketing services world. We felt that they share our gung-ho entrepreneurial spirit. Another factor was that Photon realised that it is crucial that we run independently."
Last week the WSJ reported a Brazilian company called ABC led by Nizan Guanaes had given, Pereira & O’Dell, the top management who quit AKQA, $30 million in a first round funding for a new agency. The round was led by ad-holding Grupo ABC International, a Brazilian investment fund. And the WSJ said the pair are considering raising an additional $70 million.
So in 2008 the UK based Wpp, the US based IPG and Omnicom, the French based Publicis now have new competition from Australia and Brazil. This is very interesting for a couple of reasons.
Firstly because the publicly traded companies who are based in Australia and Brazil are not beholden to the slings and arrows of the US/UK/Paris stock exchanges and therefore can have longer-term views when it comes to building truly new and inventive media companies, the likes of which haven’t been seen for many years.
And secondly, this is interesting because of the potential for other firms to rise up out of the blue from new countries where the economies are growing very rapidly. Most likely these will be countries/economies which remain dominated and controlled by the giant US/UK/French ad-holding firms.
I'm confident there will be new players on the scene...proud and visionary ad-holding or investment firms beyond the established countries who want to shape the media landscape of the future and challenge the established players. Firms from places like China, Korea, Russia, India, or Dubai, the city with the stock exchange that is buying Nasdaq and which is being touted as the next Wall Street?
Two Indian Advertising groups, Percept Holdings and Hansa Group could be big players in the network model of the future.
Posted by: Nishad | April 15, 2008 at 09:23 PM
Well said Scott. Finally there may be an alternative for indys that don't include deals on your soul. Thx for posting this.
Posted by: wjj | April 15, 2008 at 07:45 PM