Creston CEO Don Elgie was putting a brave face on things as he announced the marcomms group’s latest results in the wake of the sale of ad agency DLKW to Interpublic’s Lowe Worldwide for £28m.
Creston made pre-tax profits of £8.2m on sales of £80.5m in the year to March 31, pretty respectable in recessionary circumstances. Next year it will be quite a bit smaller of course without DLKW’s £1.9m of profits and hefty sales.
Elgie says the DLKW deal means that the company no longer has any ‘legacy’ businesses, now being focussed on digital marketing and healthy margin healthcare. “Things certainly seem to be on the up,” he claimed.
The trouble with the Creston strategy, and the problem facing many small digital outfits, is that the big agency boys are stampeding on to their territory.
Clients now seem persuaded that what they are paying agencies for is ideas, preferably ones that work in mainstream media and digital. Which means that the big agencies, nearly all part of global networks, are brandishing their credit cards at the creative talent that can execute this.
It’s easy to see from the recent Cannes advertising awards that creative agencies are encroaching on the territory of specialists. The slew of awards won by ad agency Chiat Day’s ‘replay’ films for Gatorade, including gongs in the promotions and PR categories, is evidence enough of this.
So the outlook for Creston and other smaller outfits is by no means as rosy as it might appear.