Publicis Groupe Buys Rokkan in Latest Digital Acquisition

Pool of Independent Digital Shops Further Shrinks

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Publicis Groupe has acquired New York-based digital shop Rokkan Media. The 70-person agency joins the French holding company immediately and as part of the deal will operate as an autonomous shop and keep its brand identity.

The deal means that Rokkan -- one of the few indie digital agencies left for the taking--joins a growing portfolio of digital shops that Publicis Groupe CEO Maurice Levy has bought in the past couple of years, including Razorfish, Rosetta and most recently LBi.

The challenge is now for Mr. Levy to determine how each of his digital brands etch out a special niche within the company, and how they liase with one another to best serve clients' needs.

It's likely the last deal of 2012 for Publicis, which has been highly acquisitive this year. Earlier this month it bought luxury agency AR New York, Outside Line and under BBH, a Swedish mobile firm called Monterosa. Publicis has been trying to grow its U.S. operations and has also been laser-focused on trying to increase the amount of its overall revenue that 's derived from digital marketing, aiming for that number to be as high as 50%.

Financial terms of the deal were not disclosed, but by our estimates the shop's revenue is somewhere between $12 and $15 million.

Founded in 2000, Rokkan borrows its name from the Japanese word for intuition or "sixth sense".

Its services include digital strategy and media planning, user experience, 3D and motion graphics, visual design and game/app development. Rokkan's roster of clients has grown significantly over the past couple of years and is varied, including JetBlue Airways, Chipotle, Nestlé Purina PetCare, Sharp Electronics, Caesars Entertainment, Dish Networks, Stolichnaya vodka and gaming company Bethesda Softworks.

As part of the deal, Rokkan will operate as its own unit within Publicis Groupe , and its trio of founders--CEO John Noe, Chief Experience Officer Chung Ng, and Chief Creative Officer Charles Bae —will continue to lead the agency.

Rokkan was started at an inopportune time, in the wake of the dot-com bust, and its founders didn't know much about advertising at the outset. Mr. Ng was an intern at Proxicom where Mr. Noe was a designer, while Mr. Bae came from doing creative work at insure broker Aon. The company's first major client it signed was Deutsche Bank in 2001.

It's taken about a decade for the agency to really hit its stride. By our count, the inking of this deal comes after a nearly a dozen new business wins for Rokkan this year, including being named Sharp's social agency of record in November. The agency helped launch Dishonored, the latest video game title from video game maker Bethesda, and released the Escape Routes campaign for Ford's 2013 Escape SUV. Rokkan's other clients include Virgin America, Dish Network, Time Warner , American Express and Chipotle among others.

"Over the years, we've talked to a lot of different holding companies --small ones, big ones, agencies, private equity-- and at the end of the day, nothing was a good fit," Mr. Noe told Ad Age . "We ultimately just wanted to continue to grow our agency. We like what we do and the people we work with and grow our client base. We will run autonomously and independently in the group, retain our brand and run business as usual. That opportunity seemed rare within a large holding company because some wanted to fold us into another agency...or have us keep our name and merge with another agency."

Mr. Noe added: "We think this is a great opportunity for us. We are an agency that grew from nothing, trying to solve problems as best we could. And the next chapter is us growing with resources [of Publicis Groupe ]."

Last year, Advertising Age named Rokkan one of its 10 agencies to watch. At the time, we noted the shop's ability to offer a range of services from e-commerce to social media despite its small footprint, and also stated that with its "New York ZIP code and a tendency toward designing digital properties and websites that endure, Rokkan will likely follow in the steps of other boutiques and A-Listers, like Firstborn and Huge ."

Indeed, Mr. Noe told us today: "Our intent is to become an even more significant player in the digital space."

With the added heft of Publicis as a backer, Rokkan's focus in the near-term is likely to be able to continue to grow headcount in order to scale against the much larger shops it faces in pitches. It also will attempt to open new offices--possibly internationally--and add more service offerings.

Besides Publicis, the other holding company that 's been most acquisitive in the digital space has been WPP, which this summer inked one of the biggest deals of the year with the acquisition of AKQA. All eyes are now on Profero and SapientNitro, two of the small pool of digital agencies that remain which aren't backed by a major ad holding company.

Contributing: John McDermott

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