In what appears to have become a bit of an industry trend as of late, as agencies have been increasingly sucked into one another, Bcg2 has announced it's acquired Shirtcliffe and Co, with the move going live on 1 March.
A Bcg2 release says all senior staff at Shirtcliffe and Co have integrated into the wider Bcg2 team.
“There are a number of reasons why we chose to team up, but the most pertinent is the strength it adds to our overall business and client offering,” says Bcg2 executive creative director and chairman James Blackwood.
“Matt’s [Shirtcliffe] creative reputation, specialist background and his own passion for the rural sector is a great fit with Bcg2,” he says.
“We’re expanding our footprint in the primary sector and as a result have been crossing paths more and more. That’s led to a meeting of the minds and I’m delighted to say it’s evolved into a deeper partnership. Both bcg2 and Shirtcliffe and Co clients will benefit from the get go.”
Shirtcliffe and Co’s Matt Shirtcliffe says Bcg2’s philosophy, values and approach are aligned with Shirtcliffe and Co’s own. “ … and it allows our existing clients more scope and scale. It’s been a terrific ride with Shirtcliffe and Co, and I’m really proud of what we’ve achieved over the past six years with our clients, and this is a natural evolution.”
Bcg2 managing director Michael Jarvis says the new structure adds depth to its emphasis on growing the CRM, data and digital capabilities of the group, announcing new roles.
Former general manager of Shirtcliffe and Co Alexia Walsh will become head of direct and CRM, while Anita Young, formerly at Young & Shand will be returning to Bcg2 as its new digital creative director.
Bcg2 director of strategy and planning Abe Dew confirmed there will be no job cuts.
"We're actually growing. Our agency size is now 30, including the team in Wellington."
The agency expansion coincides with Bcg2’s move into its new premises on the 12th floor of the 22 Fanshawe tower in downtown Auckland.
There have been several other mergers in recent times. Just this week the Dentsu Aegis Network announced it had acquired a majority share in Barnes, Catmur and Friends, an agency which over the last two decades has become one of the most prominent indies in the industry.
Christchurch agencies Simpatico Advertising and Strategy Design and Advertising merged early last month under the Strategy name.
In January, experiential players Brand Spanking and Fluxx announced a merger, now trading under the Brand Spanking banner from the Eden Terrace office.
In December last year WPP upped its stake in STW and increased its shareholding from 23.6 percent to controlling 61 percent.
Also in December last year, experience marketing company Uno Loco announced the purchase of rival firm Soiree in an effort to be at the forefront of the rise of experience in a world increasingly dominated by digital media.
So, why are there so many mergers happening?
Dew says as the communications landscape and consumer media consumption behaviours change you could argue that the mainstream global ad industry is in late-stage maturity and decline.
"Globally, agency networks are merging or buying each other out as they scramble over market share to protect their revenue streams as they try to protect their access to client budgets by ring fencing them within global agency holding company corrals. The failed 2013 merger between Omnicom and Publicis was probably the best example of this thinking. This is way bigger than just an New Zealand phenomenon."
He says, however, more frequent are the purchases of "little hot shops" by big networks. "This is an attempt by bureaucracy to imbibe adhocracy and the creative energy of smaller shops by absorbing them. It’s also often a way of protecting themselves from disruption by smaller specialists, and the London industry is seeing a lot of digital shops being bought out by big brands."
"These deals are usually characterised by golden handcuffs that keep key personnel on board for a set period to ensure continuity for clients. It’s ironic though that most of the small shops bought out are started by top talent from big shops who leave to shake up the industry model."
He says if you look back to when the indie revolution really took off in New Zealand, it was around the global financial crisis when the industry shrank by almost a third. "Lots of top talent started their own shops and they’ve had seven or eight years to establish themselves and build reputations for creativity and effectiveness. They may be looking for a pay-out for all that hard work now."
Dew also suggests (although he says this is subjective) that if owners are baby boomers or of generation X, then selling their businesses might be part of an early retirement planning strategy. "Cash out and downshift before the next big crash of 2016/2018 sends the industry into another wave of restructuring," he says.
"Alternatively, if they've been genuinely successful over the past few years, gaining access to an international network, development capital or complementary skills might actually help them invest in growing their businesses."