WASHINGTON, November 15, 2012 — Group FMG is responding to constantly evolving consumer behaviour where the challenge for advertisers is to recognize quickly and adapt efficiently their approach to continue to reach their audience.
Hoping to redefine the marketing equation and help guide clients through the fast-paced switch to digital Group FMG’s acquisition of Pod1, a top e-commerce agency, positions them strongly in the space.
So, consumer behavior constantly evolves and I find a large acquisition in digital fascinating. Maybe it’s because I watch a lot of Shark Tank. Maybe it’s because I own my own digital agency.
Maybe it’s because David Bonthrone, Managing Director of North America & Global Development for Group FMG and I share a recognition that digital offerings will expand to meet the amount of time consumers spend with web and mobile.
David provides tremendous insight about the future of digital, how to stay competitive and what to consider in acquisitions.
1. How does the acquisition of Pod1 strengthen your digital presence?
This acquisition enables us to deliver on our vision of developing high-quality content, which can be e-commerce and m-commerce enabled. In a world where consumers are looking to transact wherever they are, buying a top e-commerce agency also allows us to evaluate our content based on the sales metrics associated with its e-commerce components, thus giving us a more precise way to determine ROI for our clients.
Pod1 is a revered e-commerce agency in the retail, fashion and apparel space, and this acquisition sets us apart from other digital agencies who simply cannot offer the quality and scope of e-commerce services that we can.
The acquisition of Pod1 really complements Group FMG’s mission to guide brands through change brought upon by the “so-lo-mo-co” phenomenon – i.e. social media, localized content, mobile devices and commerce. We produce visually stunning content, and rich and relevant communications that help marketers launch and position new products, while differentiating existing ones.
2. Explain the importance of content in the three C’s.
I hate to evoke clichés but the saying “content is king” really does still ring true. The ability to produce memorable, engaging Content based on sound Commerce strategy and guided by Creative services will continue to set brands apart from each other. Moreover, at Group FMG we believe in four key phases to guide such content: Attract, Interact, Transact and React. This is to say, brands need first to attract consumers, then interact with them, provide them a forum to transact upon, and then react to their behavior based on user experience.
Twenty years ago, the industry slowly integrated coupon responses to print media in order to measure response. A few years later we started including 1-800 numbers in content to do the same. Then, we added a drive-to-web component, and now we are offering an e-commerce or m-commerce component. While each new phase presents a unique challenge for creative services, quality content remains core to all effective communications. Group FMG is well-poised to deliver high-quality content across all channels – from traditional to digital and beyond.
3. What is the future of digital advertising?
That is a BIG question, and one that is difficult to answer. Undoubtedly, there is plenty of growth projected over the next few years: and with good reason. Media dollars allocated to web and mobile spending are not at all commensurate with consumer time spent in these mediums. Digital advertising is so ‘metrically’ driven that you are really seeing the scientific side of the business take over. As a result, I think a certain level of creativity, and the traditional artistic side of the business has started to dissipate. That, in turn, has an impact on the type of talent the industry can attract and retain, i.e. more technologists versus artists.
Another observation with ‘digital’ advertising is that when consumers go to the web, they generally know what they are looking for and what they want. So, it is more difficult to attract and maintain their attention. I also believe television will continue to ‘entertain’ and ‘story-tell’ in a greater capacity than the web – and for that reason will continue as a classic strategic, brand building medium.
This said, I do believe that the future of digital is bright – and not just for web-driven advertising. As the cost of hardware decreases, more traditional signs and outdoor messaging will move to digital formats as well.
4. Who is your competition? What makes you better, unique?
We have a slew of companies that we compete against. Of those, some are also partners. And we like to partner. There are traditional production companies like Schawk, agency production companies like Ogilvy’s Redworks, and holding company-wide networks like Hogarth (at WPP). There are also independent companies who offer globally balanced delivery services like Avventa. I would say that they are closest in terms of ‘competition.’ However, we offer a different suite of services, including the latest in e-commerce.
What makes us unique is the fact that we are not owned by a holding company and do not have to deliver a margin to London, Paris or New York. We have also been built organically and the people in our offices in London and New York are the very people who went to India to build our offshore facility. Therefore, they have a great understanding of the workflow processes, technologies and digital asset management tools in place which are required to make delivery seamless.
As procurement further scrutinizes the ‘creative’ business for greater ROI, the need to strip costs will continue, unabated. Globally-balanced companies that can tap into lower cost work forces to deliver the same standard of solutions will have a competitive advantage going forward. That is what we are building at GroupFMG, except without a holding company margin included.
5. What are the important factors in considering an acquisition?
In any acquisition, one must think in terms of ‘got to have ‘versus ‘nice to have’ factors. To determine such information, I would say it’s crucial to ask yourself the following questions:
Is the business in a growing market sector?
Does the business have a unique and potentially “ownable” value proposition?
Does the business show solid growth over the previous 2-3 years?
Is the client base reasonably stable and are revenues split reasonably equally across the client base?
Is there an entrepreneurial spirit/culture?
What is the talent pool like?
Jeff Barrett is a recognized leader in public relations, experiential marketing and social media. CEO of Status Creative, 2011 PRNewswire Award Winner for “Best Use of Video In Social Media” and record holder for Most Strikeouts in Tee-Ball.
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