Here, he talks with Advertising Age about strategy, integration and what Aegis might look like in 10 years.
MediaWorks: What is it that you are trying to build with your recent acquisitions in the Americas?
David Verklin: We really believe there is major opportunity north of the border and south of the border. Our Canadian business has been slowly but surely growing, and we just acquired the last major independent in Canada [Genesis]. We will use that to bring out our second brand in Canada, which is Vizeum. I believe Carat will go from the No. 7 player in Canada, which is where we were 60 days ago, to, by the year end, the third-largest agency in Canada.
We also believe there is an enormous opportunity in South America in digital. The digital revolution will come to Latin America next. So we bought AgenciaClick in Brazil, which was the largest independent digital agency in Latin America. ... We fully intend to build out Isobar [Aegis' digital network] throughout Latin America ... so one part of the strategy has been geographic expansion.
MediaWorks: And the second?
Mr. Verklin: The next thing is this move to create the agency of the future -- the merge of Carat Fusion and Carat USA. That's a big deal. It's never been done before at this scale. The new Carat is 1,000 people, eight offices, 250 clients -- it includes digital creative. Nobody's done it at this scale. This would be akin to Starcom and Digitas merging, and I don't think people quite have figured out what we are up to. I don't think it takes a rocket scientist to say that you need to bring your on- and offline enterprises under one operating system. The clients are there and the consumer is there. It's not like the consumer makes a distinction between TV and online. And the clients are saying, "Just manage the brand."
MediaWorks: How have the new offerings at Carat and Aegis been received by clients?
Mr. Verklin: I gave a speech two years ago at an OMMA conference, where I said that within two years, 20% of most client spending would be digital. And everyone laughed. It's not that funny anymore. The new Carat clearly is looking at managing a business that has become digital faster than anybody could have imagined. The new Carat is much more prepared for web 2.0 ... [and] I'm surprised at the speed that clients are getting there. I think [Aegis] is ahead of the market and I'm really proud of that. We are six months to a year ahead of the market, but isn't that what I am supposed to do?
MediaWorks: Some of Aegis Group's acquisitions have been in ad serving, sports marketing and direct -- how do they fit into the big picture?
Mr. Verklin: Well, let's go through the companies. You saw us buy Bluestreak, which I think has been one of our most clever acquisitions. In the ad-serving business, the big player by far is DoubleClick. The second biggest player is Atlas, and between the two you have 90% of the business. But what about the other 10% of the business? The next big player is a company called Bluestreak, and they are particularly good at rich-media ad serving. So that brings us into ad serving. Genesis is more scale in Canada. ... We bought a company a year ago called Velocity, which is the fourth-largest sports-marketing company in America, and [event and experience marketer] Vivid.
More and more clients are asking us to manage all the consumer touch points. Do you think the marketing plan of the future is going to be simple or more complex than today? To me it's a no-brainer. The marketing plan of tomorrow has to manage an enormous number of touch points. If you want to look at the marketing plan of the future, look at your feet in the shower tomorrow. It's like the tiles of a bathroom floor, lots of little components fitting together holistically into one whole. Lots of tiles. The marketing plan of the future has to have search, it has to have site design and build, it has to have on- and offline, analytics and multicultural, electronic and out of home.
MediaWorks: How do you see the Aegis model working 10 years from now?
Mr. Verklin: It will be more and more integrated. Most agencies are brilliantly synchronized. There is a difference between synchronization and integration. Our educational system has made this differentiation clear to us, you can't have two school houses and call that integrated. Integrated means one building, one structure, one operating schoolhouse, and that's what we've built in Carat and Aegis. We need to move from synchronization to true integration ... and that will continue.