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Has Sorrell Opened the Floodgates on a Production Spending Spree?

Trends and Insight 0 Add to collection

What does news of an acquisition battle for Media Monks between S4C and WPP mean for agile, hybrid production companies, asks Laura Swinton... and who might be next?

Has Sorrell Opened the Floodgates on a Production Spending Spree?
If there’s one thing that Sir Martin Sorrell can be relied upon for, it’s to wrong foot naysayers and speculators. If his Cannes chat – and praise for Dentsu Aegis’s acquisition of Merkle in particular – had us thinking that his sights were set on big data firms, then rumours of his new holding company S4C capital’s first acquisition are likely to cause a few ripples of excitement. Not least among hybrid production company owners.

MediaMonks, it seems, according to reports in The Drum and Sky News, have found themselves in the middle of a spat between exes as both S4C and Sir Martin’s old home, WPP, are said to be circling the Dutch-headquartered digital creative production company. The international studio, with capabilities spanning creative, digital production and development, and experiential as well as traditional filmmaking certainly fits the vision outlined by Sorrell at Cannes for an integrated and nimble kind of company fit for purpose in the 21st century. But would a holding company acquisition remove all that makes a business like MediaMonks able to cut to the chase with clients and move quickly?

If either acquisition comes to fruition, it will mark something of a milestone for production companies. In the past, holding companies have been largely interested in the big, versioning houses like Hogarth and Tag. But MediaMonks is a creatively-led company which fits the profile of interesting hybrid companies with a production heritage, innately innovative, working with both agencies and clients – but without the bumf of a traditional old school agency. I can reel off a dozen other pretty cool companies that sit in this fluid space – B-Reel, Stink, Unit 9, Nexus, Tool, Finch/Nakatomi, Airbag… Will the other holding companies start to circle, looking for synergies and opportunities?

And, as I wrote in my piece for Cannes Lions Daily a couple of weeks ago, the lines between agency and production company are blurring. While the gargantuan holding company mega-deals for the likes of P&G or Mercedes or McDonald's might be appealing to mega-brands, looking to work at scale... it's the nimble, hybrid companies able to evolve like something out of the movie species that can work directly with start-up brands on a project basis in this age of disruption.

The canary in the coalmine may well be Swedish production and creative studio Acne (originators of the eponymous hipster denim brand), which was snatched up by Deloitte in 2017. Or Framestore, which was bought by Chinese Cultural Investment Holdings in 2016. But the tug-of-love between S4C and WPP is certainly likely to draw more attention.

For years production has been treated as the bottom of the advertising food-chain by agencies – so like the bullied kid, they’ve hit the gym and beefed themselves up. In any case, perhaps we should not be surprised that arch-capitalist Sorrell would recognise the power of being an ‘owner of the means of production’?
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lbbonline.com, Tue, 03 Jul 2018 16:56:52 GMT