Agency acquisitions outway the advantages of traditional recruitment, according to agency CEO’s on stage at AdNews’ Sydney L!VE.
People is the number one factor that Jack Byrne, Hatched Media CEO, looks at when he is thinking of acquiring an agency.
“We just launched into the Sydney market in August last year and one of the key reasons we did is because 56% of the talents within media agencies are based in Sydney,” Byrne said.
“So as a Melbourne based agency, talent does tap out and when you open up a new market, it accesses more talent, which means that you can get access to better people. Which means your product and step up and that's the betterment for your agency positioning.”
Chris Parker, Awaken CEO, has a similar rationale because it's cheaper and can make more cultural sense.
“We were looking at growing our performance team but we looked at the cost of recruiter fees to hire a whole bunch of people and thought it was probably better spent in acquiring an agency,” Parker said.
“We'd already been working well with another group for a while and it just made cultural sense for us to start merging them in.”
David Phillips, Deloitte Digital’s partner in marketing, data and technology, said Deloitte makes 30-40 business acquisitions a year and while people may not always be the major driver, additional capacity is.
“We look strategically around the capacity of our clients and what is growing their client service that year. Then we assess if we build, buy or borrow,” Phillips said.
“For example, emerging technology is still an issue for us - like if you have engineers who are confident in one or two languages, how do you keep them fresh in new language models?
“That’s across the practice as we just cannot possibly find and hire enough data engineers and data scientists.”
On the media side, Dominic Pearman, Pearman Media managing director, said he is looking to acquire people from news and sport.
“We want to reach people basically and with the whole fragmentation of the media you want to find out what's still going to hold value down the track, so sports and news is really important.
“If you can add onto your agency, so if you can include a PR company or something like that, then that probably makes your whole package more relevant.”
Thank you to our supporting partners: AMOBEE/UNRULY , Foxcatcher, PubMatic, StackAdapt. Associate partners: blis, JUSTEGGS, MIQ, Quantcast. And friend of AdNews: IMAA.
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