Most agencies face life-or-death struggle in 2009. Agencies will have to partner or merge to survive. Social environments are the best place to develop relations with potential partners, writes Rose Lewis
Just two weeks ago, we launched the PemBRIDGE CLUB for marketing, media, technology and content agencies who are exploring merger opportunities in the UK and overseas. Based on the success of our pilot event, it is now set to run both quarterly as a social event and 24 / 7 / 365 as an online LinkedIn community open to creative and technology firms who seek merger partners.
The first event, held on 12th January, was attended by 30 firms, predominantly from London, the North West and West of England.
In my view, two things make PemBRIDGE CLUB timely. The first is the convergence of technology, media and agency – no marketing agency can exist without smart technology and most technology provides a media and content platform of some sort. The second is the market climate where we believe most firms in the sector will struggle with a life-or-death year in 2009.
Mergers are not easy to pursue or execute. It is very hard for a company to approach other companies, worse still, potential competitors, and talk about merger. It is seen as unsavoury, or a sign of great distress. It should not be seen this way – it makes pragmatic business sense and so should be a part of business strategy. Marketing agencies, especially, shy away from these discussions or find them difficult to pursue.
PemBRIDGE CLUB works under the motto: “The numbers of a merger always work – but the people often get in the way” which means that while it makes sense economically, that two firms working together can be more resilient in hard times . Our experience is that Agencies in particular are not good at cooperating. They tend to feel strong independence and see other agencies as fierce competitors. In tough times, this has got to change – most agencies simply must partner or merge to survive.
PemBRIDGE CLUB offers the following advice to marketing services firms, media and technology companies:
- Make “partnership” with other agencies your driving strategy – abandon heads-down go-it-alone individualism
- Get to know, as a matter of urgency, the other agencies and suppliers your existing clients use
- Work with those agencies and suppliers to deliver a less costly service to your shared clients
- Work with those agencies and suppliers to help your agency offer a wider range of services
- If all goes well, take the relationship, the efficiencies and new service range to new clients
- Consider merging entities as a mean to reduce costs and cement a common goal
If you are interested to participate in the PemBRIDGE CLUB, please contact us.
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