Publicis Groupe has added yet another digital company to its vast array of same, France’s Mediagong agency which employs about 50 people and will work with Leo Burnett. Mediagong’s clients include Accor hotels, Bel, Crédit Agricole, Danone, Dessange International and Lindt.
At the same time (well, yesterday) WPP has bought yet another Chinese company, social media specialist CIC which works for Nestle, L’Oreal and Dell among others. WPP now turns over more than $1bn in China. CIC will join its rapidly-growing (although not especially profitable) Kantar research arm.
You do wonder sometimes quite what these small deals add in terms of value to such big operators as WPP and Publicis Groupe. Yes, they obviously include gifted professionals (some of whom may leave though) and, presumably, help to strengthen links with big clients (although that doesn’t always work as PG found with another digi company Big Fuel and General Motors).
But it’s yet one more company and head count to manage, no wonder WPP’s Sir Martin Sorrell (pictured) just works, works, works as he revealed earlier this week. WPP now employs about 150,000 people (many of whom are on freelance contracts) while PG gets by with just 50,000.
But surely a big, transformative deal must be on its way in the marcoms market? There hasn’t really been one since WPP paid £1.1bn for researcher TNS back in 2008 although French researcher Ipsos might differ, having paid about £525m to buy Synovate from Aegis last July. Certainly there’s been no really big deal in the agency sector.
WPP’s Sorrell is reckoned to have some £2bn to spend if he really wants to although he’s said that he only plans to spend £400m or so this year. The jury is still out on the TNS deal so maybe that’s why he’s being cautious. Maurice Levy at Publicis Groupe has said roughly the same, maybe because the company is still digesting Digitas and Razorfish, on which it spent about $2bn.
Or maybe one or other of these two inveterate dealmakers will shock us by doing something really unexpected, like getting smaller. There must be a case (for shareholders anyway) for splitting the Kantar research business (now nearly half the overall company) away from WPP’s ad agency and media buying operations. Kantar is big enough to take on market leader Nielsen on its own and, in recent years anyway, has been a drag on WPP’s growth.