Nunn Media, with annual billings of more than $330 million, recently acquired Alley, the AdNews Digital Agency of the Year. It was Nunn's fourth acquisition since 2013 and its largest.
Performance agency Alley was referred to Nunn, which positions itself as the largest independent media agency in Australia, by a mutual senior media contact familiar with the expansion goals of both businesses.
Founder Matt Nunn on Alley CEO Nick Lavidge: “We clicked right away on a strategic level, but more significantly, we had common corporate, people, and personal values, which are the bedrock of any purchase.”
What followed was an exhaustive strategic, people, and financial due diligence process over months
Matt Nunn: “We found the process to be very seamless, open, and comprehensive from both parties due to the emphasis we make on strategic fit prior to financial negotiations.
“The first thing that drew us to Alley was Nick's track record of accomplishment, vision, and commercial savvy. Alley is considered as one of, if not Australia's, top digital performance firms, so that was obviously appealing, and the awards they've won lately have just added to that impression. Their ecommerce capabilities, as well as their burgeoning digital creative growth, also impressed us.”
Nick Lavidge at Alley: “Working with the Nunn team, we found apparent synergies between the two agencies that may bring even more value to our current and prospective clients.
“We were also intrigued by their history, culture, and clear articulation of their strategy and vision, all of which were very similar to ours. We still feel the same after a few months.”
“Excellent people to work with, allowing us to keep growing the business while also assisting in the development of key growth areas such as enterprise, commerce, and creative services.”
Lavidge started Alley in 2014 -- and grew it to 40+ people with offices in three countries -- after being on the client-side for more than a decade where he built in-house marketing teams and also worked with multiple external agencies.
“Unfortunately, most of the large agencies I worked with gave me more headaches than results and I noticed countless inefficiencies in the ways they worked with their clients,” he says.
“All these agency limitations ultimately lead to diminishing trust and performance which, in recent years, have led to more clients opting to take their digital marketing and media buying activities in-house.
“However, building several in-house teams myself, I know firsthand there are many limitations to in-house that pose significant risks for organisations as well.
“This leaves many CMOs (like myself) in a tough position where they want more control of their digital media but understand that in-housing can be a very risky and expensive exercise that doesn’t happen overnight. On the other hand, brands want alternatives to the large agency holding groups which have been plagued with weak performance and lack of transparency. Also, the holding groups’ model doesn’t really support client control and ownership.
“Alley has successfully filled this gap in the market by building a hybrid in-house agency model that combined all the advantages of agencies (i.e. specialists, deep talent pools, etc.) while limiting the inherent downfalls of the traditional agency-client relationship (i.e. complacency, lack of transparency, slow response times, etc.). In other words, it gives our clients the best talent possible that feels like their in-house team but is backed by the power of an agency.
“However, Alley's unique model had been missing more traditional above-the-line media channels (TV, OOH, Radio, etc.) and this limited us to some enterprise clients who wanted to have all their media with one partner.
“By combining powers with Nunn and expanding our media capabilities, we instantly catapult ourselves into a league where we can continue to disrupt the outdated agency model while more aggressively competing with the large holding groups.
“Additionally, Nunn’s vision of building a full-service group including best in market eCommerce capabilities aligned with our vision at Alley. We’re excited to greatly accelerate our business units, such as Cohort (our data led digital creative offering) as well as our global presence, such as in the United States with the help of Nunn.
“And most importantly, Nunn has an excellent culture and puts as much value on developing their team as we do. Alley authentically cares about our staff both in and out of the office, a dedication that Nunn has shared for decades.
“I was really impressed with their approach to culture during due diligence and I’m further impressed now working in the organisation. As we rapidly scale, culture will continue to be the backbone of success for both Alley and Nunn.”
The Alley mission statement: "When you spend money on marketing, you need to make money on marketing."
Nick Lavidge: “We feel that we've authentically lived this mission having built an engine that gets consistent results time and time again. As we looked towards the future and our vision of making this effective marketing accessible for businesses around the world, we knew we needed to grow at exponential rate in order to capitalise on the current industry landscape.
“In other words, we needed to attach our fine-tuned engine to a bigger rocket. That rocket is Nunn.”
Nunn has a precise group vision, which is to enable a client's audience and brand to be connected throughout the entire communications experience in order to generate business growth. organic development, alliances, talent, product, and acquisition strategy are all guided by this goal.
Matt Nunn sees four mid-term growth areas in which he has been investing for some time and will continue to do so as part of a three-year strategy: Ecommerce and e-comm brands' preferred agency, digital creative & content, user experience & conversion, and data and identity.
“We're also considering geographic and capability expansion in Australia but have a particular focus on the United States, where we want to maintain our strong growth and momentum,” he says. “We hope to accomplish this while maintaining our position as Australia's most successful independent media and digital performance agency.
“We will always consider acquisitions as a potential growth path as part of our strategic plan, with the Alley acquisition being the first in about five years. As a result, our success and development have largely been the product of our persistent focus on organic growth year after year.”
Nunn has grown to 135 from 95 employees in the last two years as a result of organic growth and the Alley purchase. Clients include Bendigo Bank, JB HiFi, Haval,13CABS, American Tourister, Godfreys, Amcal and Smile Direct Club.
“Both organic and total growth have exceeded the media market each year for the past three years,” says Nunn. “It's something we're quite proud of.”
(This article first appeared in the March-April AdNews magazine. Subscribe here to make sure you get your copy.)
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