Dubai: The lines are getting blurred in digital. So much so, corporate communications or content on digital platforms can no longer be pigeonholed into one meant strictly for the media and another for a wider audience.
“If one needs to work on corporate reputation management or deliver a government’s viewpoint on an issue instantly, online is now the preferred channel,” said Larry Snoddon, vice-chairman at APCO Worldwide. “More than ever before, the message that is being put out does not differentiate between media and citizens. From an agency’s perspective, all of the capabilities needed to get the desired message online have to be integrated.”
Such a transition is what the bigger agency networks are hoping for. When “everything is digital” first started to make its impact felt, it did feel that smaller agencies were better placed than their generic counterparts in delivering services and the speed at which it can be done. Their size and exclusive focus would be huge competitive advantages, was the conventional thinking at the time.
Now, those very strengths seem to be wearing thin — at least that is what the big, globe-straddling networks reckon is happening in the digital realm. “Pure-play digital agencies may be finding it difficult to do all of the stuff that comes with client needs and which is why bigger agencies are winning more,” said Snoddon. “Clients want to see integrated capabilities from their agencies and not silos of expertise.”
Where they can, the bigger networks are making their dollars count through acquisitions. UK-headquartered Lowe & Partners recently bought a digital firm, Profero. But the Lowe chairman, Tony Wright, reckons that such buys have to be handled with extreme caution.
“Apart from very heavy duty e-commerce type services, the age of the pure digital business is coming to an end in my view — we are all trying to get to holistic storytelling,” said Wright, who was in Dubai last week for the Dubai Lynx Awards.
Does that make it easier for the bigger agencies — and the specialist skills that they possess — to be acquired? “I think acquisitions are difficult to benefit from in our industry compared to others because everything ultimately comes down to culture and people,” said Wright. “We are buying specific skill sets and capabilities, but not factories and hardware. So sensitivity and open-mindedness are essentials to really creating value.
“Our focus is on acquisitions that add a new capability, such as in digital, rather than size for size sake — I feel that clients are increasingly sceptical about that.”
While the Americas and Europe will be where the big digital-led transactions/acquisitions take place, market feedback suggests the UAE and other regional markets could be in line for a few deals as well. Both in advertising and PR, the big league firms are scouting around for possible equity in local or regional agencies looking for scale or a global tie-up.
“The preference would be for a local agency that is yet to make it really big; this way, the cost of buying in won’t get prohibitively expensive,” said the regional head of a leading global PR firm. “The Gulf happens to be among the fastest growing economies and for any global agency seeking better than average growth has to have a presence… a significant presence.”