Building a Successful Agency Growth Strategy

David BloisRegional Director1st October 2007

• Share some insight

• Across the total Marketing Services landscape

• Understand levers for growth

• Immersed in developing Agency Business models

• Partners in transition and reinvention

Credentials2

Strategies for Growth?

Rare Species

Financial Targets and Vision

No Route map just imperatives from the Board room

Fundamental lack of own business intelligence

Doesn’t cascade or impact anywhere

Must result in an action

3

Levers for Growth

7R’s Business model:Measures Confidence at the heart of the Agency against

Revenue Growth

Relationships

Reputation

Resource

Return

Reality

Route

1

Reputation

Revenue Growth

Relationships

Reality

Reality

Realit

yR

ealit

y

Return

Resource

RouteCONFIDENCE

6

Four Deadly Sins

Margin Improvement

Positioning

Business model

Communication

(There are more but not for today)

Margin Improvement

Good management reporting

Address low client profitability

Fame or Fortune only

Fee negotiation/open dialogue

Commercialise your people and reward them

Margin Improvement – Fame or Fortune

% of Income

60%

25%

15%

Number of clients

1-5

6-10

11-15

15 Client Model

% of Income

68%

20%

12%

Number of clients

1-5

6-10

11-34

Example – Client Gross Profit Summary

1. Unilever

2. Nike

3. Tesco

4. Premier

5. Express

6. GSK

7. BMW

8. L’Oreal

9. Mars

11 – 34. Others

Margin Improvement - Client Mapping

Re-negotiate Golden 40%

Up or Out Lock and Load

200%

100%

0%Low Med High

Profitability

Gro

wth

Positioning

Strongest Commercial driver not fluff

“Creating and owning a territory in the minds of your people and clients that allows you to differentiate and dominate.”

Positioning Can Achieve:

Olympian Status Only Choice One overall offer; multi revenue streams / buying points Value Price Increase market share with clients Create new budgets Separate Thinking from Doing Gain real Client Intelligence

Adding Value

‘Think For me’

The Wider Perspective

Great Implementers

• Reliable

• Tactical

• Reactive

• Predictable

• Safe

• Nice people

• Project based

Business Partners• Outsource

• Align visions & growth strategies

• Align business models

• Share the prize

• Long term partnership

• Contracted

Passive Active

Positioning - CLIENT INTELLIGENCE

Service Partnering

Marketers• Challenge

• Inspire

• Lead

• Be demanding

• Measure

• Real Talent

• Retained

‘Do for me’

Doing a Good Job

‘Help me think’

The Client Agenda

Business Model

The way an agency is organised and structured…

..to deliver the best quality of service and profits.

Business Model Splendid Isolation

Lack of management control and measurement

Inefficient, linear, silo based

Scalable?

Running harder to stand still

New chassis , old engine

Understand the new models

Start to value time

Profit from people

Communication

Poor across the sector

Internal and external

Critical success factor in achieving growth strategy

Agencies still structured in silo’s, baton passing

Engage and empower every mind

Effects of a Successful Growth Strategy on Exit Valuation

Premium Values Strong reputation Intellectual property rights Strong management Distinctive positioning Long term contracts Sustainable business

model brand Timing ahead of curve Scale

Discount Values Low margins >10% Unsustainable profit

record Lack of succession

management Reliance on one client Narrow field of services Weak positioning- not

distinctive.

Proof of the Pudding.. Some Recent Transactions

If you’d like to know more…

Global Dynamics

One day Conference with an evening cocktail party

Friday, 2nd November 2007Hyatt Regency Istanbul, Turkey

Leading experts in the industry will provide insights into:

Acquisition and integration best practice Trends in gaining a digital advantage Developments in search & mobile marketing Routes to international expansion Obtaining private equity Funding growth and expansion Maximising shareholder value

Speaker SelectionKey Note Speaker- Richard Pinder, Chief Operating Officer, Publicis Worldwide

Thank you. Any Questions?