Why Hyperfactory Buy Makes Sense for Meredith

Three Questions With Founders of Mobile Hotshop and Venerable Publisher (Hint: the Killer App Is Women)

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NEW YORK (AdAge.com) -- Meredith Corp. has acquired mobile hotshop The Hyperfactory after taking an initial stake in the agency responsible for the much-loved Kraft iFood Assistant app one year ago. Since the agency's opening in 2001 by two brothers in New Zealand, The Hyperfactory remains one of the most-distinguished mobile creative agencies to date, having worked with Coca-Cola, L'Oreal and, of course Kraft on its first iPad app. From those beginnings, it's grown to an operation of more than 100 people with offices in Auckland, Los Angeles, New York, Chicago, Hong Kong, Sydney and Hyderabad, India.

Hyperfactory worked with Kraft on its Big Fork Little Fork iPad app.
Hyperfactory worked with Kraft on its Big Fork Little Fork iPad app.
For a buyer that's made its name in broadcast and publishing, this is just the latest piece to add to its marketing services arm, Meredith Integrated Marketing. Since 2006, Meredith has acquired 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.

Ad Age checked in with Hyperfactory founders Derek and Geoffrey Handley and Meredith Integrated Marketing President Martin Reidy about the acquisition and how the mobile agency with roots in Auckland found a home with a publisher headquartered in Des Moines, Iowa. (There are no plans to move; The Hyperfactory will continue be headquartered in New York and Auckland.)

Ad Age: Why does The Hyperfactory make sense for Meredith Integrated Marketing?

Martin Reidy: As mobile started really picking up, a lot of people pretended that they were in the business and, typically with agencies, and this goes back even to traditional, you add some people on and declare suddenly that you're in the mobile business. Hyperfactory is really, really focused on the mobile world, which is really the model we have. Look at the agencies we have. They're specialists in that area; they don't cross over. There are interdependencies across agencies and there's incentive to bring our image forward so that there isn't a land grab on one particular client by any one agency. ... [The Hyperfactory] fits very well with the Meredith culture. We will retain the name Hyperfactory. It's very important that the culture stay intact. I think the people here have that particular technical expertise and that will only continue to grow. We will foster a family feel, but definitely it will retain that ability to be Hyperfactory.

Ad Age: So Derek and Geoff, tell me why having Meredith as a parent makes sense for your business. What does Meredith as a parent bring you?

Derek Handley: Going back a couple years ago, we started looking for a partner. The obvious choices were holding companies, and companies of that sort that we just hadn't had the best feedback from, people that we knew and other entrepreneurs that had partnered with those companies or sold their businesses to them, which made us nervous. We did want someone larger, to be able to bring the business to the next level, and that was one of the reasons we wanted to partner with Meredith.

The other issue that we were struggling with back then was we were still viewed as a boutique hotshop, highly creative and perhaps weaker on strategic thinking. We were thought to not have a full understanding of the mass-market consumer because all we cared about were shiny objects and winning awards. To counter that, there's nothing more perfect than a company like Meredith that really does understand America and has for more than 100 years. That was one thing. The other is that the first five years of this industry in the U.S. has been driven by the male mobile user and it has been about automotive and technology clients. We believe that in the next three or four years, the mobile woman and her content are going to be more and more important, so the timing is great to have really a strong position in that market. Meredith is a really interesting partner to have there. We can win new clients that we previously may have been discounted by and we should be able to create new innovation and territory around the mobile woman. Kraft is now our biggest client. We would have struggled to get them before.

Ad Age: The Kraft work is a marriage of mobile, which is Hyperfactory's heritage, and of content, which is Meredith's heritage. Tell me how the company envisions that partnership of mobile and content expertise?

Mr. Reidy: Meredith is the king and queen of content and has access to the best writers in any particular area. You consider the full-time staff of writers within marketing at Meredith and that's what's happening more in digital. Content has to get out there. Brands spend a lot of time and money on the construction of websites, but the content has to improve. There's going to be a further rethinking of how we access the content and how it can come in more interactive ways.

Geoffrey Handley: Since the beginning, we often see, and still do today, people when they decide to build a mobile site and basically shrink a website. They take content from a website and just squash it to make a mobile stream that's cut down in size and waste. Context has always been a really important thing for us. If you look at all the best work we've ever done, it's very content heavy, but that content has been produced specifically for the mobile experience. So finding a partner in Meredith, which is known for print content and its ability to realize content in a mobile context, just puts us miles ahead of the game.

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