The social-media unit now operates in Austria, Switzerland, Greece, Turkey, Portugal, El Salvador, Ecuador, Colombia, Peru, Argentina, Uruguay, Chile, Denmark, Finland, Norway, Sweden and South Africa with more than 100 clients and 330 employees. In Asia, Rally has a presence in Taiwan, Thailand, Singapore, Korea, Hong Kong, Vietnam, Indonesia and the Philippines.
“Rally is doing some fantastic work in Asia-Pacific and it’s a matter of fine tuning and adapting it to some of the European and LATAM markets,” said Carlos Agostinho, CFO of the company’s World Markets cluster.
Agostinho who took on the new role just five months ago is on a whirlwind visit to Singapore, Bangkok and Kuala Lumpur. The 20-year IPG veteran started his career at Lintas in Portugal and quickly moved to Spain to set up and manage Initiative’s operations in Latin America on the back of winning the Unilever account, a client that still remains with the agency, Agostinho proudly says.
“I know the European and LATAM markets well. I didn’t know Asia but it’s a region that is growing and it is the place to be and I’m here to leverage what we have here to some of the other regions.”
Of South African origin, Agostinho will continue to work from Madrid, which he calls a favourable central point. “I can speak to everyone I need to in the 12 hours I work.”
In an effort to accelerate growth, IPG’s Mediabrands structures itself differently from other agencies. Its three main units are North America, G-14 and World Markets, each with a separate leadership team as opposed to individual agency CEOs. According to Agostinho, Asia and Latin America are doing well within World Markets while Europe faces challenges. At present, World Markets represents 15-20 per cent of Mediabrands’ business.
We have become more profitable since we put the cluster structure together, he commented when asked about reorganisation. “Having said that, there is tremendous collaboration. We have teams that cut across silos.”
Agostinho said plans for 2015 include strong organic growth. “We’ve diversified revenue tremendously to be able to achieve that,” he said adding that the Asia-Pacific and Latin America both target double-digit growth for 2014 and 2015.
To a lesser extent, IPG Mediabrands will seek out potential acquisition targets. It recently completed the purchase of Turkish social media agency Promoqube. “We have a mergers and acquisitions team in New York and we are constantly proposing opportunities to the team. Some are followed up on and others aren’t.”
At present, the company is interested in areas where it doesn’t have capabilities. Agostinho is interested in scaling up the digital practice. “Companies that operate in the mobile, digital and social sector are obvious targets for us and competitors.”
Scale and volume are other considerations for acquisitions. “We might consider acquisitions in marketers where we’re not in the top seven or eight.” There are situations in the pipeline in APAC and other regions, the newly appointed CFO said without disclosing specifics.
On a separate note, he stressed the importance of talent. “I don’t say it lightly. Happy talent leads to good work and that increases revenue,” he said linking the bottom line to morale. The agency is investing considerably to put HR and training programs in place.
IPG’s share price has been on the rise, up 15 per cent since May. Rumours that the smaller holding company could be a potential takeover target for either Publicis or Omnicom (both of which have have shown desire to grow through acquisitions) may be behind that climb.
“Those rumours come and go,” Agostinho said. “I’m doing the same job with the same passion and that’s not going to change.”