When the parent company of the Cannes Lions International Festival of Creativity, the London-based Ascential, said on Tuesday that it has agreed to acquire MediaLink, an influential consultancy in media and advertising, many people wondered exactly what the deal meant.
Aggressive expansion seems to be one answer, based on an interview with Ascential CEO Duncan Painter and MediaLink Chairman-CEO Michael Kassan, who will continue in his role. The deal is valued at up to $207 million.
A big part of MediaLink's business is making connections. It is handling Mattel's review for its $150 million media business and is involved in the search for a new president-CEO of the 4A's, the main trade association for ad agencies. IT also frequently brings people and companies together on a smaller scale. The deal will help it capitalize on events like the Cannes Lions as it does that, the executives suggested, while Cannes Lions capitalizes on MediaLink's "connectivity" in the same way.
But the connections game is a high-touch effort. MediaLink and Ascential also offer information services that they believe can complement each other. "Whilst the human capital is critically important," Mr. Kassan said, "the opportunity to industrialize that is something we can benefit greatly from."
On all fronts, global expansion is the goal. "MediaLink serves about 200-plus companies around the world," Ascential CEO Duncan Painter said. "We serve 24,000, so we want to get MediaLink in with their business model through all the the applicable businesses and clients that we work with and expand them globally so they have a great footprint in all the countries that we operate in today, which is 160 that we trade in and 16 that we have critical mass in."
Read the full interview:
Advertising Age: When people hear Ascential, they tend to only think of the Cannes Lions. Can you explain more about the information services division?
Duncan Painter: The division is made up of effectively six primary brands that are large scale information services subscription products. They also provide brand advisory and consultancy services around what they do. The biggest brand that would be known in North America and the biggest brand in our group is WGSN, which is the fashion trend forecasting information platform. For any consumer products that are considered fashionable -- from apparel through mobile phone manufacturers, like Apple and Samsung to car manufacturers -- use the information services platform for informational forecasts that set out what's going to be fashionable for consumers two years from now and what consumers will be using. It's a product that's an access of $100 million in revenue, but it's all subscriptions.
The second biggest product in that area is called One Click Retail, which is a subscription information service that basically allows its end brands consumers, so those like Unilever, Procter & Gamble, Colgate and Mondelez, to effectively monitor their sales and shares on Amazon in comparison to their competitors.
Ad Age: How did the deal come about?
Michael Kassan: As we started to develop a conversation over the past months with Ascential, we saw the opportunity to dial up our piece of it into the information services part of the business. There's a lot we can do in terms of the productization, digitization and industrialization of our service offering. A service business is one of those things that is more about human capital and what we're trying to say that whilst the human capital is critically important, the opportunity to industrialize that is something we can benefit greatly from and that's something that Ascential certainly has expertise with.
The other piece in which we first engaged with Ascential is obviously with the event side of our business. The event strategy and tactical part of our business is a very important piece of what some of our clients look for, but it's a manifestation of what we do in terms of connectivity. We try to find opportunities to bring people together in an efficient way, and places like the Cannes Lions and Money 20/20, do it in that way. Our ability to capitalize on that and bring our unique selling proposition against those tent pole events is something we see as a great extension of our existing business line. The opportunity to have Ascential in the role of information and us in the role of connectivity is a perfect marriage of what each of us do really well.
Ad Age: Why buy MediaLink in particular?
Mr. Painter: It's a hard-headed support of clients that brings the two businesses together to really provide them a best-in-class, most-informed service to let them make core decisions around how and who to operate and work with going forward to get the best results. At the end of the day, the brand customers we serve never had a more difficult market in which to operate in. They're facing massive transitions themselves, from big box traditional retail or distribution through larger retail operations into online and marketplace transitions. They're trying to establish brands where the retail operations they're serving are contracting. They're trying to balance all that by getting more efficiency into their products and dealing with global economic and political changes that are driving all kinds of pressures through inflation and non-inflation and exchange rates, so executing success has never been harder.
We believe the information we provide to brands across all of our platforms, plus the unique information we can capture and make available through Cannes Lions and deliver to MediaLink, really does ensure that between the two of us, we can partner with our clients and give them deep information to make sure they're maximizing their performance this year and the next year. It will also ensure that they're spending money with the right kind of partners to deliver great business results for themselves and great return on their marketing and sales expenses.
Ad Age: What's the strategic advantage for MediaLink?
Mr. Kassan: For MediaLink, what it means is a validation of our business model and an understanding that we can take it the next level with geographic growth alongside Ascential. For our people it's a celebration of a job well done and a clear picture of the job we have in front of us to continue to make a difference in this marketplace and continue to find opportunities to capitalize on the change, as well as the chaos and disruption. When I say capitalize, I don't mean it in a pejorative way, but in an extremely positive way because I think it's okay to be opportunistic if in the context that you can serve a greater good for the industry. There's never been a time where this industry has been more disrupted and going through massive change in terms of the players around the table and how they find their value and satisfy the needs of their clients and customers, and we think we can help in that.
Ad Age: How about the strategic advantage for Ascential?
Mr. Painter: From our side, it's really easy. MediaLink has a great business model. It's a very well-run business with great leadership. Simply what we want to do is what we do with all of our brands, which is to expand. MediaLink serves about 200-plus companies around the world. We serve 24,000, so we want to get MediaLink in with their business model through all the the applicable businesses and clients that we work with and expand them globally so they have a great footprint in all the countries that we operate in today, which is 160 that we trade in and 16 that we have critical mass in. And we want to get them to expand their products and services into other areas of business support and brands and fashion organizations where we already have great strengths but where we can see their business model has high applicability. We can see great opportunity for MediaLink's growth worldwide, but more importantly, great opportunity to better serve our customers and brands.
Ad Age: We spoke earlier about the line between the information services side of Ascential's business and the event side, so does this deal mean that MediaLink, which is largely known for its networking and connectivity, won't be doing those types of events and activities anymore?
Mr. Kassan: No, absolutely not. We think that's going to be something that is stepped up. We've built that presence in Cannes, as well as CES. The connectivity that MediaLink is famous for is very core to our business and we think the opportunity to plug into some of the clients that we don't work with and some of the other opportunities that Ascential will present to us, if anything, are additive and accretive to both sides.
Ad Age: Are there any areas that Ascential wants to grow through its relationship with MediaLink?
Mr. Painter: We see huge areas that the MediaLink business model and the work that they do can immediately transition into a lot of the fashion brands we work with and a lot of the goods manufacturers around consumer products that we're supporting and working with in the design space. We think there's an awful lot of work that MediaLink does on the marketing side that can easily transpose into those areas.
Secondly, a big area of growth that our brands are demanding from us is how we help them activate and execute on go-to-market strategies and marketplace platforms, Amazon being the prime example. We're certainly looking across all the client relationships we have there to ask MediaLink to expand out and provide further services using our tool sets and insights to help brands really help activate their sales and drive faster sales growth for many of those businesses on platforms like Amazon, but also Jet.