Category: Insights

“Our market intelligence would indicate that 2018 will be an extremely busy and congested pitch market,” says David Indo, ID Comms’ chief executive. The current cavalcade of reviews is being likened to the events of 2015, a year dubbed ‘Mediapalooza’ on account of the vast amount of business that was put out to pitch. Back then Coca-Cola, DHL, General Mills, Honda, L’Oreal, Mondelez and P&G all moved accounts to new agencies while the likes of Coty, GSK, Reckitt Benckiser and Unilever ran pitches before opting to retain their incumbents. But according to Indo, marketers’ motivations are “decidedly different” this time around compared to their hunger for “immediate and bankable savings” in 2015. Then, “the desire to secure improved prices overshadowed everything else,” he says. Now advertisers are challenging their agencies to illustrate what measures they have in place to mitigate against ad fraud and enforce brand safety, marketing’s hottest topics. “Many brands have spent the last 18 months seriously considering their media agency requirements and getting their ‘own house’ in order prior to going to market,” he says. “If 2015 was a race to the bottom, 2018 has the makings of a year where the challenge for the agencies will be who is best equipped to race to the top.” Agencies can’t say they weren’t warned. Clients have been challenging them on their efficacy ever since P&G’s chief marketing officer Marc Pritchard set the tone almost exactly a year ago with a landmark speech demanding the industry face up to the concerns around its “murky at best, fraudulent at worst” media supply chain. And marketers, at least, appear to have heeded his call – reviewing not just their media business but increasingly large swathes of their creative and communications needs too. “The communications marketplace is evolving at an ever-faster pace and many advertisers are quite naturally questioning how they can best operate in this environment and whether they have the right shape and skills internally and externally,” says Debbie Morrison, a director at the advertisers’ trade body, ISBA. “The status quo no longer delivers the results that these organisations need.” Such a frank assessment from the organisation that styles itself as the Voice of British Advertisers will do little to reassure anxious agency bosses. But the onus is on them to better allay clients’ concerns and in turn their own, according to marketing procurement consultant Tina Fegent. “Agencies have not been proactive in talking to clients about the issues,” she says. “I appreciate it’s a hard call to make but I haven’t seen any proactive discussions with clients. This affects trust.” One thing the major marcomms groups have been doing is working hard to remould their agencies into the image they believe clients now crave. The Havas Group developed a new tool to give its clients a complete view of a programmatic buy, from where ads are going to how much they are spending. Called the ‘Client Trading Solution (CTS)’, it’s not a way to trade programmatically but is being pitched as a “client facing, fully transparent control tower displaying all programmatic trading”. Publicis has focused on simplifying its services and made much of its ‘Power of One’ model which brings to bear for clients all of the group’s operations from creative, to media to digital under one roof and one chief executive. It will be pressure tested by the Asda review. WPP, meanwhile, has focused its efforts on consolidation of an even more permanent kind with the merger of its media agencies MEC and Maxus into “media, content and technology agency” Wavemaker, which launched this month. It’s easy to see why agencies are doubling down on consolidation and simplification. Published last year, the second Media2020 report by Media Sense, ISBA and IPSOS Connect – which surveyed 250 senior British marketers – recorded an uptick in respondents stating that they will use fewer agencies in the future compared with the first survey, conducted in 2015. In fact, 62% of marketers agreed they will use fewer second-parties, up 4% in two years. But Paul Frampton, who was the chief executive of Havas Media Group UK & Ireland until November last year, questions whether marcomms groups – generally – have moved quickly enough to respond to clients’ ever-changing needs. “The winds of change for agency holding groups have been predicted for some time but the volume of big business being reviewed so early on combined with the simultaneous aggressive challenge from management consultancies was unexpected and will create nervousness from analysts,” he says. “Brands are demanding both a new strategic model and genuine transparency, but the bigger holding groups seem slow to provide either.” Those who might fill the gap include smaller independents who could compete on price but might not have the capacity the biggest advertisers require and the management consultancies who, as Frampton hints, have bullishly parked their tanks on the lawn of the marketing industry in recent years. But despite hoovering up advertising and digital agencies in recent months, and increasingly touting their creative credentials, the likes of Accenture and Deloitte have shown little appetite thus far to compete at scale in the media buying business. A third possibility, and one that marketers are increasingly exploring, is the option of bringing more of their marcomms requirements in-house. Internal creative agencies are already relatively common, and the setup has proved successful for Specsavers, Channel 4 and the BBC who have drawn plaudits for the quality of their output. In-house media trading desks remain lesser spotted but that may change with P&G’s newly revealed plans to “automate more planning, buying and execution and bring it in-house”. Alex Tait, a former Unilever marketer who now runs the consultancy Entropy, says he’s been speaking to “a lot of brands” who have been mulling over the best way to structure their marketing efforts. He does not, however, think a wholesale shift to in-house media buying at the expense of agencies is imminent. “The fact is that maximising ROI with modern media and marketing communications involves getting the right model across internal and external teams, platforms etc,” he says. “Full outsourcing isn’t a very sophisticated approach but there are a lot of levels in between. You’d have to be very confident with your capability to bring all media buying in house which I don’t see many brands doing in reality.” So the outlook may not be as gloomy for agencies as the spate of recent reviews and restructures would suggest, but testing times await as 2018’s answer to Mediapalooza gets underway. The best thing the likes of WPP can do now is to remind advertisers – and their investors – of the qualities they possess that can’t be so easily replicated by startups, consultancies or even clients themselves. “WPP has some great creatives sitting within its various agencies. It needs to push these to the forefront,” says Tony Walford, partner of corporate finance advisory Green Square. “There are huge pressures on driving down costs within agency groups, but one thing that cannot be commoditised is creativity. Most clients would be prepared to pay a premium for great work and WPP should be both pushing its creative credentials and letting shareholders and the City know that creativity is largely immune to downward pressures.” Whatever tactic agencies adopt in the pitch warfare that’s to come, there are literally billions riding on them getting it right.  Read more

These days, it’s all about acquiring capabilities – to beef up an offer, perhaps, or to expand into new channels. Interestingly, most of the deals during May link into the field of channel marketing. We’ve looked at this before in The Drum of course, but as so many deals were done in May I thought it would be appropriate to revisit it. For those who don’t know, channel marketing is the use of partnership to allow a brand or service to reach a wider audience, rather than just trying to sell one thing in one place. In effect it’s a kind of B2B marketing that has been used for ages by tech companies (eg Microsoft or Sandisk working with vendor or retailer partners) and by the grocery industry (eg Heinz working with the supermarkets) to reach end users or consumers. Another example might be a jeweler selling on QVC rather than via a few specialist jewellers; or selling beer at music festivals and football games rather than just through pubs and shops. As a channel – or perhaps more accurately, discipline – the lines of what defines channel marketing have become increasingly blurred, and it increasingly overlaps with other forms of B2B marketing, shopper marketing, events, experiential and even performance and affiliate marketing. One of the longest, but most effective channels, is the impulse/convenience retail chain. In the latter, a manufacturer would typically supply, say, crisps to a wholesaler, who would then supply a corner shop, whose owner/staff would then pass on to the crisps to the consumer. At each stage, marketing is involved: manufacturer to wholesaler; wholesaler to retailer; and finally retailer to consumer. Sometimes there will be marketing from the manufacturer directly to the consumer – in the form of a TV advertising campaign for instance – but for this (expensive) investment to succeed, everyone in the chain or channel has to have bought in to the idea and to stock and pass on the product: no good advertising something that can’t be bought anywhere. For channel marketing to be effective, relationships and support networks have to be built. Specialist agencies are often used for this purpose. An example of this would be 3ree, an agency based in Singapore, which was last week acquired by Always Marketing Services, China’s leading field and shopper marketing company (which is majority-owned by WPP network JWT). Founded in 2010 by Tan Li Li and Isabel Cheong, 3ree offers event management, sourcing and production of marketing premiums, project management for exhibitions and activations, and design and creative services, as well as digital marketing; so it’s a classic channel marketing agency. Always offers trade marketing, including merchandiser management and retail audit; retail marketing, including promoter management, in-store activation and retail environment designs; as well as shopper marketing, including point of sale design, events and road shows, as well as premium design and production. The two businesses complement each other very well (and 3ree fits in nicely with WPP’s long-term strategy of making acquisitions in growing territories or channels) and the acquired agency has business in key Asian markets, including Malaysia, Indonesia, Vietnam, India, Japan, Korea and Australia. Clients include Microsoft, Mitsubishi Electronic, Seagate and StarHub. We’ve written before that the big audit and management consultancies – EY, KPMG, PWC, Deloitte, McKinsey and so on – with their ability to offer strategic insights, represent one of the biggest challenges to the established agency networks, so it was no surprise to see KPMG snapping up Nunwood, an independent consultancy specialising in customer experience management and feedback technology a fortnight ago. Founded in 1996, Nunwood has offices in Leeds and London. Advising companies across the retail, telecoms, financial and leisure industries, its acquisition enables KPMG to offer a full-service customer management programme to its clients, from mapping the customer journey to measuring ongoing feedback. Nunwood’s ‘Fizz: Experience Management’ technology is used by organisations like British Airways and Nationwide to provide customer information to hundreds of managers, often in real time. Commenting on the transaction, Richard Fleming, head of advisory at KPMG, told the media: “This deal is strategically very important to KPMG as it will enable us to provide clients with the tools they require to be truly customer-centric. Nunwood’s understanding of the issues driving customer behaviour, and the way they focus on improving customers’ experiences mirrors our approach of putting technology at the heart of everything we do. “By combining forces we will be able to help clients take action, so that each decision they make is based on real-time customer feedback. At a time when companies are worrying about their market share, the combination of KPMG’s Customer and Growth capability with Nunwood’s expertise in managing the customer experience will create an advisory business ideally placed to help our clients as they grapple with the realities of a fluid customer-base that is increasingly selecting services on the basis of their experiences.” Again, from those remarks there appears to be an intent to sew up the channel experience. On a smaller scale, another recent channel marketing deal that caught my eye this month was digital agency Stickyeyes’ acquisition of Peterborough and London-based content marketing agency Zazzle Media. Content marketing is a discipline which has an increasingly close relationship, and overlap with, channel marketing. So it’s another astute buy: the joining of the two companies represents a very good fit of digital and content marketing expertise. Both brands will remain independent, but will work in an integrated fashion: Stickyeyes will continue to provide SEO, paid search, social media, PR and digital consultancy Zazzle the content marketing. And there have been more – Publicis’ media network ZenithOptimedia’s acquisition of the Czech and Slovak performance marketing agency B2B Group; UK outfit Periscopix being bought by the giant US Merkle group; or Candy Crush tycoon Mel Morris’ investment in Derby-based channel specialist BriefYourMarket.com (which specialises in intelligent, preference-based newsletters and e-mails). As a side note, it’s worth pointing out that BriefYourMarket.com achieved growth of 3,821% in the space of just 12 months, making it one of the UK’s fastest-growing companies. There was also the April merger between Pink Gorilla Marketing and Hairy Lemon Events in Leeds, creating a company (the somewhat inelegantly named Pink Gorilla Hairy Lemon) that will on fashion shows, bar and restaurant launches, sample sales and corporate events. Given that Leeds is starting to boom again after the recession, and has a comparatively young population, it’s not hard to see PGHL picking up clients pretty quickly. Even last month’s £190m buyout of price comparison firm uSwitch by property site Zoopla, which looks on the surface to be one internet company buying another, demonstrates the importance of channel marketing in today’s increasingly blurred marketing landscape.

That evening proved to be a turning point. Having spent seven years single-handedly growing The Eventa Group to the point where it had ten employees, Mr Hill realised that if it was to expand any further, then he needed to create a proper management structure to help him to manage his employees and his business better. He immediately brought in Nick Shuff, a director and business partner, and between them they developed a management team, including a marketing manager, an HR manager and a finance director. The impact was dramatic. Turnover went from £1.7 million to £10.1 million in four years and the number of employees jumped from ten to seventy-five. “It turbo-charged growth, it was just phenomenal. All of a sudden we were one of the top 100 fastest-growing companies and I was winning entrepreneur of the year awards. “I don’t think we would have got that level of growth if I had not made those decisions then, to invest in that management team and get that level of expertise in.” It’s a challenge that many entrepreneurs will recognise. One of the biggest hurdles for owner-managers is learning how to manage, and delegate to, employees. For an entrepreneur with a clear vision of what they want to achieve, it can be particularly hard to learn how to delegate, trust and motivate workers. Cracking the issue is often the key to success. According to the latest ECI Partners survey of high-growth companies, 54 per cent of respondents said that investment in staff would be a growth driver for their business over the following year. Lara Morgan had to learn on the job about managing employees. Having started her toiletries business, Pacific Direct, on her own with nothing but a fax machine, she eventually built and managed a team of 467 employees before selling the business for £20 million in 2008. She now invests in small companies through her business, Functionality, including activbod, a skincare range, and Gate8, a luggage company. “Managing people can be emotionally stressful,” she says. “Humans are not infallible and the huge amount of mistakes they make through the poor management of people can be the breaking of any business. In my mind, the greatest and continual challenge of any growing enterprise is that of managing people.” One of the key things Ms Morgan did at Pacific Direct was to make sure that she continually engaged with and rewarded staff. She would come back from work trips with photocopied pages of business books that she had read, to share with them, and occasionally would surprise them by giving them bouquets of flowers and taping £50 notes under their chairs for them to find. She even once took the entire workforce, then 26 people, on an all-expenses paid holiday to Barbados to reward them for hitting a profit target. “I have made many mistakes along the way, but I still stick to the belief that most people want to do a good job and a great job. When people are treated with respect and given fair rules, and are included in the conversation to deliver the best service, then your chances of successful retention skyrocket. “Compared with other company growth challenges, the people piece will always be my greatest trial. Nevertheless, the reward of loyalty, laughter and work enjoyment far outweighs the turmoil.” Tony Walford, a partner at Green Square, says that managing employees in a fast-growing business is particularly tricky because of the speed at which change takes place. “When the business employs five or six people, you are one big happy family, but as it gets bigger, that’s when the problems start because somebody has to become the boss. You can’t have 50 people sitting round the table at lunch having a nice chat; you have to decide who is going to take leadership roles.” He argues that there are two key challenges to managing employees well in growth companies. First, you need to make sure that you are constantly monitoring the needs of the business. “As the business develops, everything changes — you will find the roles that need filling will change, and new roles that weren’t needed before popping up, and you suddenly find someone sitting there doing a job which they shouldn’t be doing. You need to be constantly on top of that.” Second, you need to make sure you are constantly monitoring the needs of the employees. “If you can give them career progression and training and enhancement, they are more likely to stay with you.” There has rarely been a better time to get it right, as companies face the prospect of a talent shortage for the most-skilled workers as the economy picks up. According to the same survey from ECI Partners, 82 per cent of growth businesses in Britain said that they were experiencing a skills shortage, with 13 per cent describing it as a “significant issue”. If it’s getting easier for skilled employees to move on, it makes even more sense to find ways to convince them to stay put. Six keys to success Lara Morgan’s tips for managing staff in a growing company 1 Set clear “key performance indicators” from a carefully considered role description 2 Work to understand what makes each person tick and how they like to be treated 3 Put communication at the top of your management style. Inclusiveness, limiting hierarchies, fairness, consistency of standards and treating others well all go a long way 4 Look for ways to celebrate progress and outstanding performance. Reward people with the things they want, not what you guess they would like. Do not make the mistake of taking people out for lunch to celebrate great work when they could take their partner out at your expense instead 5 As the business grows, make sure that people find new challenges and are given training and that you continually invest in your team members, including external professional supporting qualifications 6 Be firm but fair, never forceful, bad-mannered, moody or inconsistent. Management must be fair and even-handed or else managers rapidly lose the respect of those they lead

It’s this skill, or a perceived lack of it, that gets a certain kind of Mad Man all wistful for the 1960s, 70s and 80s, when beautifully-crafted messages (either on TV, in print or on billboards) ruled the roost. Everyone with an interest in marcomms looks back fondly to the days of O&M, DDB and CDP, and great campaigns for the likes of Volkswagen, Hovis, Guinness, Rolls-Royce and Heineken. Now, by fairly common consent there is a greater emphasis on delivery, meeting budgets and driving costs down, basically getting things done as quickly and cheaply as possible. The dazzling speed of technological change and disruption and the increasing realism and interconnectedness of both gaming and virtual reality, has shifted the marcomms industry’s focus onto technology and channels. This isn’t all that surprising – after all, there are almost unlimited possibilities for getting messages out there, and gaining consumers’ attention and engagement; but I wonder if the time might not be ripe for a reinvigorated focus on content. Now, content is a word that has been bandied about for some time, but not always that convincingly. Some of the bigger agencies with their quite understandable interest in data, digital and mobile media and strategic, consultative partnerships and ROI have been a bit behind the curve. Because at the end of the day, this business is all about moving people – to rage, to tears, to laughter; because the message won’t get through unless you entertain, inform, educate or benefit people. This was borne out by a law firm conference I attended the other week, in which an audience poll revealed that when asked the question ‘What’s more important? Digital advertising or content?’ over 90 per cent plumped for content. What does this mean? It means that people don’t like advertising (especially annoying banners and roll-overs that disrupt one’s web browsing), but they will watch stuff they find funny, or interesting, or useful. In fact they’re happy to do so. They want stories, not advertising. Over the past couple of years there have been some interesting stirrings, particularly in the startup sector: agencies specifically geared towards creating content have been springing up. An interesting example I came across was Kameleon, a London-based startup founded in 2008 by two guys from media giant Mindshare. The company now employs over 35 people and has done some impressive work for the likes of BA, Chivas, Sony and Volvic. Kameleon does most of the things you’d expect a full-service agency to do: strategy, creative, media, distribution and – this is crucial, because not many people are doing it that well at the moment – evaluation. Content and storytelling is at the heart of everything they do, and is usually based around online video – which is not only the fastest-growing marcomms channel, but also the most effective. And it works just as well for B2B as it does for B2C. Others, like London’s HubTV are moving from pure video production into creative and strategy, offering clients something akin to what the old full-service agencies used to offer. It’s a fascinating area, which will grow as content marketing becomes more important – and I’m sure it won’t be long before the big boys start sniffing round many of these such companies. None of this is actually new – content marketing is as old as advertising itself. As long ago as 1892, Dr August Oetker, he of baking powder fame, used to push his products by printing recipes on the back of the packaging. In 1900 French tyre firm Michelin wanted people to use cars as much as possible (so they’d sell more tyres) and developed a travel guide that offered tips, maps and articles on places to visit, eat and stay while on the journey. Given away free, it was a sensation, and remains perhaps the most effective and famous piece of content marketing ever. Nowadays big retailers like M&S, John Lewis/Waitrose, Sainsbury’s and ASOS all create customer magazines (effectively content marketing) with production values, editorial quality and readerships equal to, or greater than, traditional news-stand titles. Then there are what the Americans call ‘infomercials’ – perhaps most familiar here from the likes of QVC or those long-form demonstration/benefit films made by gadget firm JML and shown on late-night and daytime TV. But by far the fastest-growing, and most important, vehicle for content marketing is online. It started off a bit dull – white papers or e-books that you could download. But over the past decade, with ever-increasing broadband speeds and the growth of video-capable mobile devices, video has exploded. Content can be accessed any time, almost any place. Even more important, thanks to increasingly sophisticated analytics, advertisers can learn more about who’s watching their content, where, for how long, and how often. This allows the content marketing agency to improve, tweak and refine their content to make it even more effective. Although YouTube has by far the biggest each of any video channel, it’s not that great for lead generation, because YouTube’s real job is to generate ad click revenue for its owner Google. But specialist platforms like Wistia are more focused on real analytics and measuring ROI. All the great past masters of advertising – Bill Bernbach, David Ogilvy, Howard Gossage – knew that without great content, marketing could not be effective, nor (in Ogilvy’s case) did it deserve to exist. There’s an old school of thought, dating from more than half a century ago, which held that if you were going to interrupt a person’s day with advertising, you had to do it with wit and elegance or else give them something they found useful or entertaining. It’s a pity that this attitude has now largely died out, because today there is far too much advertising, and far too much of it is bad. Achieving ‘cut through’ is becoming increasingly difficult, especially as consumers and busy executives are now increasingly cynical and dismissive of marketing messages. As I alluded earlier, people don’t want to see advertising, but they will engage with good stuff. What is best about great content is that it just works. Everywhere. In PR, mobile, customer publishing, long-form advertising, DM… any discipline or channel would benefit from an injection of content-creation skill. And for forward-thinking creatives, this offers the opportunity to put their craft at the very forefront of the industry once again; there is no reason for a would-be Bernbach to feel marginalised by suits, planners and data geeks ever again. And that can only be good for the whole industry. Trawling round the net these past couple of weeks, I’ve actually been really heartened by some of the good work being done by the likes of Kameleon, Seven, Velocity, Videojug and others. What the nascent industry (there’s even a Content Marketing Association, whose website is worth a look) now has to do is to really make sure that it gets its measurement and evaluation nailed down. The case for content marketing will then become un-ignorable and the big clients and later, the big agencies, keen to get involved in the action, will come knocking. There is a good deal more I want to say on this subject so we’ll be returning to content in a fortnight or so’s time.

1. Decide what the problem is. Work out exactly why they are difficult. Is it because they take up so much of your time with endless demands? Is it because they don’t pay enough for the service you are offering them? Is it because they are rude or abusive to your staff, or continually want what you cannot provide? Once you have pinpointed the problem, the solution will become more obvious.Tony Walford, partner at Green Square business consultancy says: “Look at why they are driving you crazy. If it is because your business hasn’t delivered what you said they were going to do, then you need to address that and rectify it.”2. Listen to them. Treat any criticism as useful feedback. Unless they really are completely impossible, take note of what your difficult customers are saying. If you are fed up with customers asking for products or services that you don’t provide, ask yourself why you don’t stock them. It could be that you have missed a gap in the market. If they are asking for more than you think you have agreed to, it may be that the original contract was not sufficiently precise or well worded.3. Work out what they are really worth to your firm. This is not just about calculating how much money they spend, it is about how much of your firm’s time they take up. Then ask yourself, is the gain really worth the pain? Difficult customers can not only sap your energy as you spend all your time trying to please them and attend to their every need; they can actually do irreparable harm to your business by diverting your attention away from the good customers who might have been willing to spend a lot more money with you if only you hadn’t been so preoccupied elsewhere. 4. Bigger is not always better. And don’t spare your biggest customers either. Indeed sometimes your biggest customers can be the worst culprits, because their size and negotiating ability means they are likely to have hammered out a tough deal with tight margins in the first place, and because there can be a tendency of firms to put the needs of bigger customers before those of smaller customers who might actually be making you more money. Yes it can be hard to lose a big revenue client, particularly if your industry is ranked by revenue, but ultimately it is profits not turnover that counts. 5. Decide if you could put up with their demands if they paid you more. If the answer is yes, arrange a meeting and tell them you are sorry but you need to increase your prices in order to be able to service their needs. That way you either get them at a better margin, or they go elsewhere and the problem is solved. If the answer is still no, tell them and make it clear that your decision is final. Walford says: “Sometimes you get tricky customers and no matter what you do for them it is not good enough, or they are just nasty. You really have to sit down and say this isn’t working for us, we are working to the best of our ability but we don’t think this is a great relationship so we should call it a day.” 6. Take positive action. Don’t attempt to drive unprofitable customers away by simply ignoring them and giving them increasingly poor service. Customers talk to each other – if you give one customer the cold shoulder word will get around and your reputation will suffer and you may find yourself losing more customers than you had planned. 7. Support your staff. Often it is your employees who bear the brunt of rude or horrid customers, so make sure they know you are on their side and are prepared to stick up for them, otherwise you will end up with a seriously disaffected workforce as well. Listen to their suggestions about how best to deal with the situation and offer them the option of handing over the client to a colleague to deal with instead. Walford says: “Support your staff otherwise they will get demotivated because they are being forced to work with people they don’t want to work with. If one of your staff is being bullied by a client or being treated badly, ask them what they want to do and if you can, involve them in reaching a solution.” 8. Pass it on. If the service your customer wants is no longer the kind of service you offer, recommend them to a competitor, and tell the competitor you are doing so. Don’t send them customers from hell though, as they may one day return the favour.

So it was interesting to see the news earlier this week that Omnicom Media Group (Omnicom’s media business unit, which includes agency brands like OMD, Novus and PHD) had bought Mobile5, the UK mobile marketing agency that counts Samsung, Canon and Trinity Mirror among its clients. Now this of course doesn’t mean that the “Publicom” merger isn’t going ahead – the acquisition of companies by both entities will carry on, albeit not on a huge scale as the merger beds in. They simply cannot discuss what they are looking at until the deal is finalised. Nobody is saying how much money changed hands in this latest deal, but it must have been a tidy sum. Although less than three years old, Mobile5 already employs over 30 people in its London offices, and has a tasty client list, as we’ve already seen. Mobile5 – set up by mobile veterans Oli Roxburgh, Steve Clarke and Guy Marks, all of whom appear to be staying – will continue to be run as a separate agency within Omnicom’s OMG network, based at the latter’s London offices. Interestingly, Mobile5 will be familiar to OMG boss Colin Gottlieb and his team – the former has already worked with the latter on a number of accounts, notably PlayStation and Waitrose. So why did he buy? I think there are two reasons. The first is that there’s a mutual synergy between acquirer and acquired. Mobile5 provides services such as mobile strategy and insight, mobile experience design, mobile content creation, mobile commerce and marketing solutions. Good, funky, creatively-led stuff – the kind of start-up DNA that big networks like OMG are always seeking to inject into themselves. But what Mobile5 doesn’t do is planning or buying: this is of course something that OMG does very well. “They are doing the stuff that’s further upstream and that’s the stuff that we’d rather have on top of our existing services,” Gottlieb said in a media statement earlier this week. It looks as if Mobile5 will now provide mobile services to its new owner’s EMEA agencies network. And the second reason? That’s more strategic and tied up with a rather different deal done by Omnicom on the other side of the Atlantic. Earlier this week the network signed a year-long contract with Instagram, the Facebook-owned photo-sharing service. How much the deal was worth isn’t clear – the amount was not officially disclosed and I’ve read figures ranging from between $40m and $100m; whatever, it’s a big deal. This is the first time that Instagram, which has 150 million active users (60 per cent of them from outside the US), has signed a deal with an ad network. In fact, it’s only been taking ads since last year. Essentially, Omnicom creative and media agencies will create “ads” (possibly in the form of sponsored photos or streamed advertising) which will be delivered to Instagram users. A high level of media placement skills – not to mention sensitivity – will be needed if Instagram users (many of who have been muttering about leaving if Facebook tries to show them ads) are to be fully engaged. I have heard that Omnicom will be putting its best teams on this – so ads will be of very high quality creatively and almost “manually” placed, by tapping into the reams of data provided by Facebook. Instagram’s tentative moves into advertising have, by all accounts, been pretty successful. But they’ve all been within the US and – given almost two-thirds of Instagram users are elsewhere – to really make the deal work on behalf of clients on a global basis, Omnicom will have to use or acquire local talent. This is where a UK-based agency like Mobile5 comes in. Also, whilst Instagram is available on the desktop, it’s primarily a mobile service (which is what prompted Facebook to pay $1bn for it back in 2012). Again, for the tie-up to work properly, Omnicom will have to ensure that it has people with experience in, and understanding of, mobile as a channel and a space. And again, this is where an agency like Mobile5 excels. I can see Omnicom making similar acquisitions in other territories in the coming weeks and months as it seeks to ensure its media agencies rule the mobile space. Unless, of course, another network has other ideas…