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Saturday, 01 November 2014

What do you give up when you sell up?

From: Esomar Congress 2012 blog

Selling your soul, as Faust found out, is generally an unwise and painful thing to do. But, as a small MR agency, does selling to a bigger rival have to mean “losing your soul”? The question was posed by Communispace’s Diane Hessan in a panel debate on best practises in merger strategies at the Esomar Congress in Atlanta.

“It’s a bit of a red herring,” said GfK’s Debbie Pruent – which has, in the past year, bought Bridgehead International and Knowledge Networks. “Hopefully there is a cultural fit [between the companies being brought together]. I think the larger companies have a process and a lot more money to spend on things like integration.” And importantly, she said, the firm would “never” axe the team at the small agency that had been responsible for dealing with client accounts.

Pruent did concede that there is “an opportunity for hiccups at the beginning” of any integration process – but largely, she said, being acquired brings benefits to smaller companies. “They want scale and the ability to go global,” she said.

“Sometimes a company keeps growing and [the original founders] cannot manage it anymore, so they sell up,” explained Ipsos’s Carlos Harding. This then frees those founders to start something new if they choose. “In this industry,” Harding said, “the cost of entry is quite low. Anybody with an entrepreneurial spirit and client management skills can start a company. It’s easy to do.”

SSI’s Kees de Jong agreed with Pruent that there is plenty of opportunity to make mistakes at the outset of a merger. Most importantly, he warned: “Nobody cares about your vision for the future until they know whether their job is safe.”

Readers' comments (2)

  • Sounds like a really interesting discussion, actually.
    From the client side, it's a bit of a tricky one. The reason why a client goes with a smaller agency in the first place is often to do with nimbleness and an individual approach - both of which rarely survive through the process of being assimilated with larger agencies. And IME, it is generally assimilationg: the company doing the buying generally is not a similarly small agency (as it has the money to make purchases), and so is usually set in its own, rigid ways.

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  • Slightly one sided debate? Ipsos, GFK and SSI.. how's about hearing from a company/founder/staff that have been acquired?

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