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Wednesday, 03 September 2014

Cello aims for a 'powerful realisation' with its latest moves

It has bought out co-creation specialist Face and brought together Leapfrog and RS Consulting. But do these developments move Cello Group closer to its goal of helping clients achieve “powerful realisation”?

On Monday, Cello announced that it had completed the final buy-out of Face, the co-creation planning agency it had previously invested in. The company said that it opted to acquire the whole agency, because it considered Face to be vital to its new company mission of achieving “powerful realisation” for clients.

But what does that mean? Cello describes it as “cutting through the increasing mass of customer data and discovering the real value of information for brand owners, allowing them to deliver results more quickly than the competition”.

In the era of social media, the company says brands are increasingly looking to agencies to move away from traditional face-to-face or web-based surveys and consider a wider range of research methodologies that feature the direct and active collaboration of consumers with a company’s internal and external stakeholders, helping them to position, innovate and communicate their products and services.

“It’s fair to say that when Cello first invested in Face, it was to hone in on the youth market, but now social is so much bigger than that it needs to be explored much more as an asset”

Andrew Needham, founding partner and CEO of Face

Andrew Needham, founding partner and CEO of Face

This is where Face comes in. The company uses co-creation techniques, netnography and social media research to help brands interact with and understand consumers both online and offline. Clients include Coca Cola, Google, O2 and Reckitt Benckiser, among others.

Andrew Needham, founding partner and CEO of Face, is now one of Cello Group’s 13 managing partners following the buyout and is responsible for expanding the international capabilities of his agency. He told Research: “There’s a real desire within Cello now to prove that we aren’t just another marketing services group, but have got a great grasp of the demands for global insight and strategic marketing. It’s fair to say that when Cello first invested in Face, it was to hone in on the youth market, but now social is so much bigger than that it needs to be explored much more as an asset.”

Ahead of the Face acquisition, Cello announced that it was forming an alliance between two of its main market research brands – RS Consulting and Leapfrog Research and Planning. Jane Shirley CEO at Cello Research Group, told Research: “The alliance means the two business will be working closer together from a single location, with all the benefits that come from being able to pull on the resources and talents of two companies.

“With an allied offering,” she said, “we are better equipped to show a deep understanding of clients’ businesses and can work in a global context more effectively. The onus is on us to be delivering better research for our clients.”

In addition to these moves, Leapfrog’s co-founder and Cello managing partner Judy Taylor is setting up a new business within the Cello Group. Details are vague at the moment, but Shirley says she is “following her passion for strategic planning to create a new offering that will enrich Cello’s capabilities for client briefs in the future”.

So what now?

Underpinning all this is a desire, on Cello’s part, to be known for delivering powerful research and insight capability. In its 2011 results, Cello’s research and consulting group reported gross profit increasing to £41.3m from £36.9m and headline operating profit rising to £7.2m from £6.9m. Cello said that continued spend from its “large, long-term global client relationships” was the driving force behind the growth. Maintaining this growth is essential and so it is looking to the likes of RS/Leapfrog and Face to expand its client base beyond the health and pharma companies that dominate, into areas like FMCG, telecoms and retail.

“Our social intelligence capability is developing fast, and becoming a core element of our overall expansion strategy as a group”

Mark Scott, CEO of Cello

Mark Scott, CEO of Cello

As part of his new global remit Needham will also be responsible for managing a “material” capital investment in some of Face’s existing research platforms such as Pulsar, for social media and mobile research, and MyFace for communities research. The purpose of this will be to develop research and big data solutions that combine communities, social media and mobile research across the Cello Group.

“What’s great is that Cello are showing appreciation for just how many opportunities can arise from technology,” says Needham. “Such platforms are essential for providing FMCG brands with the evidence they need to continue investing in new media research formats that offer them engagement with their audiences wherever they are and whatever they are doing. It’s also crucial for making our global footprint as wide as it can be, combining the research credentials on the ground from other Cello firms with our expertise.”

Mark Scott, CEO of Cello, added: “Our social intelligence capability is developing fast, and becoming a core element of our overall expansion strategy as a group. This core area will help shape our overall future.”

Pitch intermediaries, who help manage client/agency relationships, welcomed the news, but expressed caution at the speed at which the developments have happened.

“The somewhat rapid formation of a London partnership [for RS and Leapfrog] and the departure of [Leapfrog MD] Tim Brooks will certainly raise eyebrows. However Face has always been an intriguing business and will enable the group to explore new territory. This will be a great asset to have on their side when talking to new business prospects, so long as they can prove that all the research businesses are working together and have a concrete platform that will adequately meet client needs,” said one source.

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