Services: Green Square

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.