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Monday, 30 November 2015

First impressions of a possible Ipsos-Synovate deal

As Ipsos confirms that it is in talks with Aegis about a potential acquisition of its research business Synovate, the industry has begun to consider the possible implications of such a deal.

Rumours of talks between Ipsos and Aegis about a potential buyout of Synovate were only confirmed this morning, and both companies have so far said very little other than to emphasise that discussions are at a very early stage.

But Ipsos did reveal this afternoon that the talks were with a view to bringing together “one team… under the Ipsos banner”.

Meanwhile the research industry is already busy speculating about what the buyout of one top-ten research agency by another could mean.

Tim Britton, UK chief executive of YouGov, said: “There have been murmurs of Synovate being offloaded for a while and when you see the consolidation at the global end of the market, it is no surprise that Ipsos feel the need to bulk up. I think it is likely to stimulate the mid-range and smaller companies. It will probably offer us market opportunity as clients look around for an alternative to what will – deal allowing – be the big three.”

From the point of view of Andrew Tharme, joint managing director of SPA Future Thinking, a deal would mean “one less competitor”. But Tharme said it will be interesting to learn more about the thinking behind the potential buyout. “Is it more cost-saving driven or do they have very different and complementary business units, geographics, services? The latter is always the one people prefer, but the quick win is to make cost savings overnight,” he said.

Danny Russell, marketing strategy director of BSkyB and chair of research user body Aura, offered the client perspective. Buyers, he said, “will primarily worry about whether it will have any detrimental effects in terms of lowering quality or increasing costs, neither of which we will know until any potential deal is agreed and operationalised. There is a certain amount of scepticism around any potential benefits – not that I’ve read of any specifics – that bigger [consolidated] agencies can deliver, as often the separate companies remain relatively independent from one another. As always with these things, the proof will be in the eating.”

Given the long-running speculation about Aegis’s strategy for Synovate, the news was “not a bolt from the blue” for Justin Sampson, chairman of ICM Research. Clients, he believes, will continue to look to the agencies that can offer the best people. “The big question that they will be asking is, does this change market research’s ability to do that?”

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Readers' comments (4)

  • The choice of words in Ipsos' press release were interesting "its not possible to predict whethere these negotiations will be completed successfully or not" followed by their signature "Nobody's unpredictable" :-)

    As a client Ipsos has been a technicolored mish-mash across the globe with varying standards and different tones of voice (depending on which agency they sourced their staff from in each location). Synovate has been relatively consistent driven largely by its price platform and in pockets some good staff.

    As a client it would be key to see if the big bang will result in a better 'predictable' consistent reliable voice for the merged agency.

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  • Most of Synovate's core talent has already resigned after Chedore's departure 2 years ago. So Ipsos should buy in for cheap. Synovate does not have in any case any core USPs. It is still 'research', not so 'reinvented' despite its repeat claim.

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  • what does this acquisition mean to synovate... any expert view please

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  • What will happen with all the Synovates branches throughout the world? Will it mean that they will fire all the staff?

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  • That seems extremely unlikely.

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