Noted industry forecaster dies, Havas parent Vivendi sells stake in Universal Music Group: Agency Brief
Happy New Year. It’s been a relatively sluggish week as agency staff—those that got a break—gradually return to their desks and screens to start setting the wheels in motion once again. A friendly reminder that time is really running out to submit to Ad Age’s A-List awards—entries were extended to Jan. 7, for all you procrastinators. That is your final warning!
Anyway, can anyone relate to this bingo card?
Industry mourns forecasting pioneer
Adam Smith, who has been GroupM’s futures director since 2006, died on Dec. 27 at the age of 58 after a battle with cancer, Campaign U.K. first reported. Smith joined WPP’s media buying arm 14 years ago from rival Publicis-owned Zenith, where he was head of publications. His passing marks a significant loss to the industry and his peers reflected on his contributions to both GroupM and advertising at large. Shirley Brady, the managing editor of R/GA's FutureVision, called him an "original thinker" in a Twitter post.
In a internal email obtained by Ad Age, Kelly Clark (GroupM’s former global CEO who was replaced by Christian Juhl in October and now serves as executive director) called Smith “a source of inspiration, insight, friendship and humor” as well as “a wonderful man, husband, father, colleague and a true friend to many of us.”
“He established our forecasting and publishing operations, building it from scratch with many of you,” Clark writes. “He always asked us challenging questions, and the answers illuminated the data and created interesting stories. He made GroupM and WPP the industry leader in understanding media markets, and in defining the important contribution of marketing to the business world and the broader global economy.”
Smith is widely known by industry execs for establishing GroupM’s global forecasting practice, which offers extensive insight into the health and direction of the marketing sector.
WPP has now renamed its annual Atticus Awards’ Grand Prix—which honors original thinking in communications—to The Adam Smith Award in his memory. Smith is survived by his wife Maria; children Sam (14) and Poppy (12); mother Barbara; and sister Diana.
Vivendi's Universal Music Group sale
French media conglomerate Vivendi—the owner of agency holding group Havas—has sold a 10 percent stake in Universal Music Group to Chinese tech giant Tencent Holdings for $3.4 billion, according to The Wall Street Journal. Under the deal, Tencent also has the option to double its stake—to as much as 20 percent by Jan. 15, 2021—in the Santa Monica, California-based record label company behind top-100 artists like Billie Eilish, Drake and Post Malone. Vivendi has been criticized for seemingly dragging out the sale process—it first announced plans to unload as much as half of the UMG business in July 2018.
In its 2019 third quarter earnings report, released in October, in which Vivendi confirmed it was negotiating a sale of a 10 percent stake in UMG to Tencent, the company also noted that it would be looking to sell an additional minority share in the company “to other partners, some of whom have already expressed an interest in investing at a similar price level.” In the first nine months of 2019, Vivendi reported that revenue from recorded music rose 15.6 percent and streaming sales climbed 23.4 percent. By comparison, Havas’ revenue grew 2.9 percent in the first nine months of 2019, while its organic growth declined by 0.6 percent.
A spokesperson for Havas deferred comment to Vivendi, which did not respond, so it is unclear what impact, if any, the sale could have on the agency network. The Annex, Havas’ culture-focused agency arm, partnered with UMG’s Capitol Music Group in August 2018 to expand to Los Angeles with the launch of Annex Tower Creative. Located in the Capitol Records Tower in Hollywood, Annex Tower Creative acts as an alliance between the U.S. creative agency and record label—fueling collaborations between brands and artists.
Don't knock these boots
Tecovas is trying to sell the cowboy boot as the “official shoe of America.” As everyone is clearly already well aware, they are the ideal footwear for the farm, business meetings and weddings, the DTC brand argues in two new ads—“Official Show” (below) and “First Rodeo." The spots were created by Austin, Texas-based agency and production shop Greatest Common Factory. The latest campaign builds on Tecovas’ “New Frontiers” mantra that aims to drive “lasting value” for the brand. Tecovas, the maker of boots and leather goods, has been expanding into other apparel as well as opening bespoke retail stores in certain markets. The brand first began partnering with Greatest Common Factory, which was founded in 2011, a year ago. The agency created an initial campaign last spring featuring a rugged cowboy who doesn’t shy away from anything–pink drinks and snakes included. The latest campaign features 15- and 30-second spots that are running across TV networks and sites like MSNBC, ESPN and Fox.
“We want to make Tecovas mean confidence to millions more people to ensure the brand a place in their futures,” says John Trahar, head of Greatest Common Factory. “New frontiers will always be relevant. So will western goods and self-confidence.”
M&A value falls among every holding company but one
While most of the big agency holding companies pulled back on their budgets allotted to mergers-and-acquisitions in 2019, Publicis Groupe was the outlier, outspending even the top consulting groups like Accenture and Bain Capital on its deals, according to a 2019 global M&A value report from consultancy R3. After an assessment of 489 M&A deals in 2019, the report estimates a total of $27.7 billion was invested globally overall last year—a decline of 15 percent from the spending estimates in 2018. According to the report, agency holding companies cut the number of M&A deals they did in 2019 by more than half from the previous year.
“Restructuring has shifted attention away from volume and forced holding companies to attend to integration,” explains Greg Paull, co-founder and principal of R3. “It’s been about what’s going to help win new business.”
Publicis Groupe, with its high-profile July $4 billion acquisition of Epsilon, was the top buyer in 2019 (it’s total deal value came in at $4.2 billion), per the report. Dentsu did lead the holding groups in terms of number of transactions (12), the report says, but its total deal value came in at fifth place ($397 million). Bain Capital was in second place with a deal value of $3.1 billion in 2019, Accenture was in third with $1.5 billion in deal value and Blackstone was in fourth place with a deal value of $750 million.
Some final wins of 2019
Sebring International Raceway—Florida’s road course auto racing facility established in 1950—selected Orlando-based full-service shop &Barr as its new lead agency partner. The agency will provide cross-channel creative development as well as media planning and buying for the company under the partnership. &Barr’s first task will be to develop an integrated campaign to promote the raceway’s doubleheader event, SuperSebring 2020, that will take place March 18-21. John Story, senior director of marketing, business development and communications at Sebring International Raceway, says he first partnered with &Barr in the 1990s for a campaign for the Daytona International Speedway. “While &Barr clearly understands the consumer we are trying to reach, they have also demonstrated excellence in digital media, which is the most effective way for us to reach new customers and communicate with our existing fans,” Story says.
HLK, a St. Louis-based creative and technology agency, announced the recent addition of six new clients: UniGroup, Schnucks, Steel Tube Institute, Beltone, and Arch Grants. For transportation and logistics company UniGroup, HLK will develop new digital experiences for its brands Mayflower and United Van Lines. HLK was named brand agency of record for St. Louis-based supermarket chain Schnucks. Steel Tube Institute hired the agency to evolve its brand messaging, redesign its website and build its digital presence. HLK was tasked with a project to revamp hearing aid company Beltone’s website. Global startups competition and nonprofit Arch Grants hired HLK to refine its brand, messaging and digital experience.
Independent agency Gatesman recently added three international accounts to its client roster: construction manufacturer USG, digital dentistry Carestream Dental and CFA Institute, the global association of investment professionals. For USG, Gatesman was named agency-of-record for its Sheetrock Brand Gypsum Division following a review. The agency will handle public relations duties and develop and execute a campaign designed to raise awareness to digital dentistry for Carestream. And Gatesman will lead the planning of the CFA Institute’s 73rd Annual Global Conference including developing the creative for the event.