Adland’s big four holding groups have long dominated the marketplace, but a new breed of acquisition hungry holding companies are turning to Asia for new growth.
With Asia leading the post-recession market, a new breed of holding companies like Dentsu, London-based Engine, Next Fifteen Communications and Cheil Worldwide, are going head to head with the giants of the ad world — WPP, Interpublic, Omnicom, and Publicis — to expand their operations.
In November last year UK-based Engine announced its move to Asia and hired industry veteran David Liu as chairman of its Asia operation, based in Shanghai.
Liu, in Hong Kong this week ahead of its first China acquisition, said it had already held discussions with around 40 independent creative, digital, event and branding agencies.
In Hong Kong, local agencies Eight Partnership and Fluid Group have been considered but Liu said both deals are unlikely to proceed.
Liu told Marketing Engine has set its sights on the China and India markets and said achieving $100 million in revenue within three years was realistic.
“We are not going to be the biggest holding group in the world, but we want to be the best,” he said.
“The key issue for us is not money. Acquiring revenue is easy. The key thing is people.”
The renewed interest in independent agencies has sparked another London firm Strategy & Investment Partners to launch a dedicated Asia operation and this week announced respected creative director Jimmy Lam had joined as chairman of its Asia operation.
S.I Partners has advised independent agencies including Kitcatt Nohr on its acquisition by Publicis as well as the London-based digital content agency Holler, which again sold to Publicis.
Charles Fallon, partner at Strategy & Investment Partners, said already there were “a few” deals in the pipeline, which will be announced in due course.
But he said it was his company’s intention to be part of the first acquisition of a major Western agency by a Chinese firm, which he said was inevitable.
“It’s going to happen within five years,” he said. “Just look at the automotive industry.”