Meredith Corp has taken a minority stake in its biggest agency to date, London-based Iris Worldwide.
This is just the latest in a long string of agency investments and acquisitions for Meredith , which has been quiet in this arena since last summer but previously bought interactive shops O' Grady Meyers and Genex; viral-marketing shop New Media Strategies; health-care marketing agency Big Communications; and database and analytics shop Directive, all since 2006.
But the sheer size of this latest bet rivals Meredith 's entire agency unit to date: Iris, with nearly 800 employees globally, has headcount more than double the Meredith agency division's own. (That division, Meredith Integrated Marketing, was also renamed Meredith Xcelerated Marketing today, or MXM for short.)
This technically isn't Meredith 's first international investment: Last summer it acquired The Hyperfactory, which has since moved headquarters from New Zealand to New York. Iris' global footprint is undoubtedly much larger, with offices in in London, Manchester, Amsterdam, Delhi, Beijing, Shanghai, Singapore, Sydney, Melbourne and Mexico City.
"I've had experience running global networks and wanted to make sure as we expanded to where our clients are moving right now," said MXM President Martin Reidy, former president-CEO of Publicis Groupe digital agencies Modem and Dialog. "This is not a silent investment by any means. We'll be operating very, very closely."
If all goes well with that close collaboration, Iris could ultimately become a Meredith shop out-right. Past Meredith acquisitions, such as The Hyperfactory, started with minority stakes.
Even with The Hyperfactory, MXM had $173 million in worldwide revenue last year, entirely in the U.S, according to Ad Age 's DataCenter. That was down nearly 3% from the year prior, even with added revenue from Hyperfactory. Iris had just $9.6 million in U.S. revenue, but $106.8 million in worldwide revenue.
Global expansion has also been a focus for the iCrossing digital agency owned by Meredith competitor Hearst. ICrossing recently acquired Santiago, Chile-based Wallaby Group. Hearst bought iCrossing for $325 million last summer in its first move into agency services. Unlike Meredith 's agency strategy, however, it bought one large shop at once instead of rolling up smaller shops over years. With Iris, Meredith may be taking a page from Hearst's playbook.
Founded in 1999, Iris has specialized in digital, retail and CRM for clients such as Microsoft, Sony Ericsson, Unilever, Volkswagen and Philips.