Dentsu Aegis Network (DAN) is looking to build out and strengthen its capability in addressable advertising, customer relationship management (CRM), fulfilment and other areas of e-commerce.
By offering up full 'end to end' capabilities this keeps the client in its digital ecosystem for much longer and sees the network capitalising on the shift towards managing more and more of a client's interactions with customers and prospective customers.
DAN AUNZ chief executive Simon Ryan says the network is focusing its M&A strategy on parts of the digital economy that clients are gravitating towards. These include CRM services, addressable advertising, creative mobile and being able to pin down consumers across the whole consumer journey.
The lucrative CRM space is still untapped for many SMBs who use manual or outdated methods of tracking customer data, with firms like CRM giant Salesforce, as well as Oracle and Adobe, winning the CRM slice for many large businesses.
“If we look at the current digital ecosystem, whether we like it or not the force of change is here and we're seeing a huge amount of money shift into CRM and digital and addressable advertising, creative and at scale,” Ryan tells AdNews.
“So they are the businesses that we're interested in. It's not to suggest that we don't have that capability now, but we're always chasing new capability to bring to our existing clients.
“A large portion of our clients – whether they with Carat, Vizeum, Dentsu Mitchell or Isobar – actually work with more than one of our businesses.”
Ryan has been building DAN's performance marketing and content capability for some time but addressable advertising and fulfillment are more recent additions to his list of targets (check out DAN's network of businesses below).
The M&A strategy is aligned to DAN’s move towards a more centralised approach to market for the execution of services. This is reflected in recent moves to bring media buying under Amplifi rather than individually sitting within agencies.
“If you look at the media agencies as being front-end consultancy businesses that are driving strategy and data and audience at the core, and then you look at then working with Amplifi to execute that, that's where the specialty is,” Ryan explains.
“Media agencies have to change to own that client relationship, be the trusted custodian, drive consultancy at a very top level and be across what is the agency ecosystem. Because those agencies will work with With Collective, Accordant, Isobar, Amplifi, Story Lab – it's their job, as custodians of the client management, to work with the operating role of the business to come back with adhesive infrastructure approach to our client briefs.”
‘Consultancies see us as a threat’
Adding a holistic cradle to media services is important for media agencies in an increasingly competitive market. In the past year management consultancies like Accenture and PwC have been encroaching on media agency turf, leading some commentators to speculate that it could squeeze weaker agencies out of business.
Ryan says he’s not worried about their threat and says competition is healthy.
“For me, it's all about having a consumer/client-centric approach to everything that we do, and we focus on our own capability,” he says.
“I think the threat of consultancies has been real for a decade. Sometimes we pitch against them and sometimes we win against them, other times we don't. It really depends on the brief.
What Ryan believes works in the favour of media agecnies is that consultancies don’t have the “end-to-end capability or the fulfillment capability” of media agencies.
“What they are very good at is providing that top-down perspective on what clients should be doing,” he adds. “What we're seeing now is clients are coming to us, so we're winning those sorts of consultancies through a couple of the media agencies and Isobar now. As much as some agency groups will see them as a threat, I think they see us as a threat too.”
Media agency consolidation
AdNews asked Ryan whether there was scope to merge any of DAN’s three media agencies, particularly in the wake of a global realignments at rivals. WPP has just opened Wavemaker, a merger between Maxus and MEC, while Publicis Media recently reorganised six media agencies into four.
“We have global propositions and each of those propositions are different from a planning perspective, a data perspective and a positioning perspective,” Ryan says.
“Different clients buy into different models. So, I think we need that front-ended strategic model to be different and provide a different offering.
“That allows us to be competitive in market. It allows us to pitch in with different clients and it allows our clients or prospective clients to choose which brand that they want to work with. So, no, we wouldn't consider doing one.”
One thing Ryan is adamant about is that Dentsu Mitchell will continue operating irrespective of whether it loses its largest client, the Federal Government.
A review of its master media agency contract is currently in market.
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