Getting bigger while staying independent were the core factors that led WE Communications to acquire Shanghai-based Red Bridge Communications and Singapore’s Watatawa in March, in a move that signalled the PR agency’s intention to boost its offering in Asia-Pacific.
Having seen steady growth in the region, Matt Lackie, APAC EVP of WE Communications, told Campaign Asia-Pacific the time was right to make a statement and seek rapid growth by adding two complementary agencies to the fold.
“As an independent company, our ability to put our people and customers—and not the financial markets—at the center of our business means we can take the long-term view,” he said. “Being independent doesn’t mean we have to do everything on our own. Some of our greatest work is done with partners that bring specialist capabilities to the table. Our acquisitions are great examples of that vision.”
The numbers show the size of the growth for WE. The acquisitions take WE's APAC revenues from US$11 million in 2016 to more than US$20 million. But Lackie has his sights set on a “critical mass” of upwards of US$35 million in the region.
A step in the right direction came with WE’s win of Lenovo’s APAC communications mandate, formerly held by Text100. Handling the PCs, tablets and data businesses, WE is in charge of all PR strategy across Lenovo’s four APAC teams, developing the tech company’s ‘Different is better’ brand message across the region.
Lenovo APAC comms head Stephanie Shi said WE’s integrated communications capabilities were a key factor in the brand’s decision.
Independence and integration
Speaking to the heads of all three agencies, it is clear that bringing their complementary capabilities together was a unifying factor in the deals. Moving forward, all three will have a fuller roster of communications and marketing services to offer clients, old and new, which allows them collectively to compete at a higher level.
For Watatawa, which will become a WE subsidiary but keep its name, access to WE’s broader skills and entry into China, through WE Red Bridge, were key considerations, said Simon Pangrazio, founding partner.
“It allows us to offer our clients things WE can provide and vice versa,” he explained. “Our focus is corporate financial consultancy to the c-suite function.
“We also recognise that you have to be able to, in that context, deliver digital, social, analytics that those clients needs as well. So it’s a sweet spot for collaboration across the firms.”
Watatawa is keen to use WE’s network to expand in APAC, with Pangrazio eyeing longer-term plans Indonesia and Hong Kong. For Penny Burgess, founder of WE Red Bridge, expansion is also on the agenda, and the agency is already moving into WE’s existing Beijing office.
“Culturally we’re very aligned already,” Burgess said. “Socially minded, people-focused, female founded, independent. We have a strong reputation in the market, and WE enable us to accelerate into new markets and sectors in the region. To their tech and healthcare heritage, we bring in our integrated marketing, brand communications and digital capabilities and align with their offers in China.”
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Lackie said the cultural factors at both agencies played a strong part in making the deals happen, in that all three players are “independent companies committed to their people and purpose”.
But, on a wider industry level, he said the acquisitions allow for a new integrated, independent offering at scale that comes at the right time, when brands are re-examining their agency relationships.
“We firmly believe that in the future smaller, specialist shops coming together in cross-discipline partnership will be the pebbles in the shoes of the holding companies,” he said.
Pangrazio said this common belief was instrumental in Watatawa’s decision to join WE, as did Burgess at Red Bridge.
“In the current climate, clients are looking for an alternative,” she said. “They want an independent network with an integrated offer, which can still be fast and nimble across multiple markets. That’s our shared vision.”