WPP AUNZ is looking at acquisitions and geographic expansion to build revenue at the local arm of the world’s biggest advertising group.
An investor presentation to the market provides some clues to what type of businesses the company is looking at.
CEO Jens Monsees says the acquisition earlier this year of martech company Dominion in New Zealand is a good example of what WPP AUNZ is looking for.
Dominion, recognised for its Adobe Experience Manager (AEM) development, with the biggest team in the local NZ market, has been merged with WPP AUNZ's global innovation and experience design agency AKQA.
“That is exactly the type of portfolio enhancement that is bringing us the scale and the growth that we are looking for,” Monsees told investors in a presentation delivered remotely.
He also wants to take a good look at SE Asia as a market.
“We are talking about advertising with 650 million people and therefore 1.3 billion eyeballs that need to be addressed," he says.
“They are growing, their wealth is growing and I think it's time to enhance our footprint in the market.”
However, Monees says the opportunities are more tech based and he doesn’t see huge acquisitions ahead.
“I see a few interesting opportunities at the moment in the market which has scale, recurring revenue, with obviously very profitable growth.
“We are looking very detailed into these options, but they are smaller ones.”
WPP AUNZ, like the rest of the advertising industry, has been moving to protect its business from the economic fallout of the coronavirus crisis by reducing overheads through cuts in salaries and other spending.
At last report, the company was forecasting earnings between breakeven and a $10 million loss for the first half of 2020.
The company told its AGM that net sales were down 6% over the first quarter with early impact of COVID-19 hitting in March. In March net sales were down 10.8% on the previous year. Net sales fell 22% in April.
As part of WPP AUNZ’s restructuring since Monsees arrived at the company is the establishment of the Centre for Excellence (COE), headed by Tim Matheson in the new role of chief technology officer.
The division brings together skilled practitioners from across WPP AUNZ. More than 300 employees have already been assessed on their tech platform competence, with plans to grow.
The COE’s main focus is marketing automation, drawing on partnerships with global tech and platform companies such as Microsoft, Google, Salesforce, Adobe and Sitecore.
Matheson says he’s looking at acquiring specialised business.
“We’ll be doing an evaluation and looking at where the gaps are and the opportunities and looking to specialists to come in," he says.
“The decision will be around whether we build it, whether we acquire it or whether we partner to help offer that new service.
“A lot will depend on timeframes, how quickly we want to do it and how big the opportunity is. We’ll evaluate based on that.”
A slide from the investor presentation:
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