This year has seen the Big Six advertising groups take a hit to their coffers.
The poisoned chalice of Brexit uncertainty, tech dominance, and the misplaced ads scandal has taken a sizeable chunk out of their bottom line. WPP, famously a bellwether of the state of industry, slashed its growth forecast for the second time, leaving the world’s largest advertising group facing its worst year in a decade.
One firm that is bucking that trend is the new kid on the block, MSQ Partners, founded by former management consultant Peter Reid in 2011. The multi-disciplinary group of six companies is the fastest growing in the UK, earlier this year reporting a surge in revenue to £45.2m, up 19 per cent year on year. What’s the secret?
“Two important ingredients to our success are definitely that we have grown up with a digital-first attitude and have a much more agile business model – enabling us to serve clients seamlessly in a number of different ways,” says Reid.
“Both of these elements are now being valued more and more by clients, and both are alien to most big networks.”
“Building on this,” says the chief executive, “we are just as effective (and just as happy) serving clients through an individual agency as we are building a bespoke MSQ team for Hertz, drawn from multiple specialisms. And the great thing is, both offers are growing strongly.”
There is an argument that a lot of firms in the space are over-exposed to sluggish developed economies and FMCG. Reid says this is certainly true of the big networks as they struggle to grow faster than GDP over the medium term in developed markets. It’s a little different for MSQ – despite over 85 per cent coming from US and UK brands, it is the number one international consumer branding and design studio in China. Reid explains:
“In part, this is because we work with a broader range of clients – large multi-nationals and emerging brands whose budgets are generally growing – but it is also because we are winning more than our fair share of new business. Brands are increasingly looking for a more agile alternative to the big networks and are attracted by the proposition of having the full range of marketing capabilities under one roof.”
The group has an interesting model, defying industry norms. Founded upon the acquisition of six firms last year, when it started trading, it has already had significant international presence across disciplines from digital to PR, advertising to design, and acquisition and lead generation capabilities in B2B as well as B2C.
“Since then, we have focused on adding in specialist capabilities – like data science and analytics – that strengthen an individual agency or the group’s overall proposition, and can be integrated. The key for us here is to find a team where there is a strong cultural fit,” says Reid.
Defying the norm is at the core of MSQ’s startling success. The group has partners like a law firm, something not usually seen in adland.
Reid says the power of collaboration is something he has believed in from the beginning. While much of that is derived from recruiting people with the right mindset, he adds: “if you want people to collaborate, you need to give them an incentive to do so.
“By giving all senior managers a stake in the group, you mitigate the risk of them just focusing on getting revenue into their agency, and by emphasising the ethos of partnership, you encourage people to want to help each other whenever possible. “At the end of the day, however, it is important to remember that ultimately it is all about ideas and creativity – and this needs a culture and approach that is very different from your average law firm!”
Although its international presence is already significant, and its success seemingly unmatched, MSQ is on a warpath, looking to replicate its fortunes elsewhere. New York is the logical next step, says Reid, “but we are already thinking about where we might go after that.
“The great thing is that this requires building our individual agency capabilities in new markets – such as twentysix and Smarts in New York [two of the firms that make up the group] to complement what we already have – while at the same time developing our multi-disciplinary offer. So, once again, we’re creating a dual engine for growth.”