LONDON (AdAge.com) -- Naked kicked off 2008 with a real head-scratcher. In February, the communications-planning network that's long been one of the ad world's juiciest acquisition targets finally announced that it had sold itself. But the buyer wasn't WPP or Publicis or some other holding-company giant. Naked, which shook up the U.K. and a number of international markets with its rethinking of marketing plans, was going to a little-known Australian company called Photon Group.
Besides confusion, there was much disappointment, mainly centered on the suspicion that the deal was all about the partners cashing out and that the union would do little to help 9-year-old Naked spread its brand of media-agnostic thinking across the globe.
That turned out to be anything but the case.
In 2008, Naked grew a whopping 40% to revenue of more than $40 million. Brands from more than 30 countries work with Naked's 10 offices, and its client list includes Coca-Cola, Kimberly-Clark, Nokia, SC Johnson, Adidas, Heineken, Lego, Chanel, Diageo, Sony and Honda.
Not only has the deal not stymied Naked's growth, but Photon has forced Naked to be more rigorous in its paperwork, something founder Will Collin describes as a "boon." Said Mr. Collin: "We are tighter on forecasting and cost control, and better run because now we have a clearer idea of where we make money."
The Photon deal, which got the partners $37 million upfront with the potential to double within four years, was all about being bigger, more ambitious and having a stronger financial footing to grow the business. Naked has a strong presence in Europe (six offices), and the New York office currently services North, Central and South America.
But in getting bigger, Naked hasn't lost its innovative edge.
Telling marketers what to do
Garbhan O'Bric, head of marketing communications for Diageo Ireland, appointed Naked in 2008 to reposition the Budweiser brand, and credits them with a "big product innovation."
"Traditionally an agency tells us what to say," Mr. O'Bric said. "Naked tells us what to do. Thanks to them we are thinking differently about the type of relationships we want to create with the consumer. We are not looking at what to tell the consumer, but how we want the consumer to feel."
|Managing director, Naked, London|
|Managing partner, Naked, Stockholm|
|Managing partner, Naked, Stockholm|
|GIVING IT AWAY:|
|Mobile brand Djuice teamed with Naked to improve students' lives with free goodies.|
Working on the principle that "It's all about the suit," Naked brought to life a shop-floor mannequin who appeared at A-list events such as the Venice Film Festival, the Belgian Grand Prix, and on Pamela Anderson's arm at a Vivienne Westwood runway show during London fashion week. The effect was to create press speculation about the identity of the mystery man (Michael Jackson was a popular guess), until a traditional campaign featuring the Van Gils mannequin launched with the tagline, "It's all about the suit."
The mobile-telecom brand Djuice teamed with Naked to promote its student package. Instead of empty talk about how Djuice improves students' lives, the idea was to spend every marketing dollar making life better for students. There was a generous giveaway program -- ramen noodles, soda, movie tickets, school supplies, free-music-download vouchers -- but the company's biggest public-relations coup was to fund the highest-aid student job in Norway at $75 an hour.
"We are well-placed to help clients who are being told that they need to cut budgets, but that their targets are unchanged," said Mr. Collin. "This is where our objectivity comes into its own. A financial crisis is when people are willing to question the fundamentals and take a clear sighted look at things."
For its Asia-Pac presence, Naked has two offices in Australia and one in Japan, but there's still a gaping hole in the network across China and India. Like the American colonists in the 19th century, Mr. Collins feels that Naked's "manifest destiny" is to conquer all available territory. With that in mind, Naked has been actively sounding out these markets, looking for the right people and opportunities to open there.
Mr. Collin said, "There are clearly huge opportunities in China but there are also challenges. The marketing-services business operates differently there and has its own path of evolution. Clients need to recognize the deficiencies of the status quo to be ready for us."
Barry Dudley, chief operating officer of Naked, said India "is massively TV-dominated. It's a simple market and we don't need to win much business to open there but it's tough. People are not so entrepreneurial. I have two or three dialogues a month with India but we haven't found the right people and the market isn't right yet."
It took them more than two years to find the right people in New York, and for the market to be right -- "We kept coming back to the U.K. feeling confused or scared," Mr. Dudley admitted. But it was worth the wait. The New York office -- led by Paul Woolmington and M.T. Carney -- grew by 80% last year, albeit off a relatively small revenue base.
"In the U.S. -- through luck and judgment -- we arrived at exactly the time that mainstream marketers knew [marketing communications] needed to change. We launched in the U.K. with challenger brands, but in the U.S. we sidestepped the second division and went straight in with the blue chip global brands," Mr. Collin said.
Maintaining their difference
Everywhere it goes, Naked will be faced with intense competition, from media agencies and from creative agencies -- all of whom want to own the creation of the idea and the communications strategy. But Naked's founders are confident they can maintain their point of difference.
"Others take the language and apply it as a coat of paint to what they've done before. They talk a good game and then do what they would have done anyway, with a 5% difference," said Mr. Collin. "We are fundamentalist in our belief about objectivity. Our people and our clients have to have the religion -- o believe that this is the right way of working."