Departure of DNX founders from Ogilvy puts the dampners on future B2B agency acquisitions
The news last week of the departure of Drew Nicholson and Domini Pettifar from OgilvyOne Business was a big surprise. The pair arrived at the agency behemoth almost exactly two years ago as part of the biggest acquisitions in B2B agency history.
The official figure was undisclosed, but given their gross income was £6.7 million, it’s pretty safe to say it was a multi-million pound deal.
In both monetary and philosophical terms, it was a big commitment from both sides to build a truly world class B2B agency operation, marrying the entrepreneurial spirit and flexibility of the former DNX outfit in Surrey, with the corporate brand, reputation and buying power (amongst other things) of Ogilvy’s loosely-defined B2B operation.
Both sides are keeping quiet about precisely what went wrong, with only euphemistic references to “lack of shared vision” in the press release to go on. Doubtless both sides are smarting from their failure to achieve their objectives, and make the project work, although probably to different degrees.
It’s difficult to argue that, as new OgilvyOne Business CEO Sam Williams-Thomas points out, corporate agendas and objectives change, and sometimes people have to change with them. What’s less clear is what the catalyst for this precise change was, or what form it took. About these things we can only speculate.
What does this mean for future agency acquisitions?
Beyond the immediate fall out, frustrations, disappointments and general egg-on-face for those directly involved, there are more worrying implications from this episode for future B2B agency acquisitions. When the news of Ogilvy’s acquisition of DNX came through it looked as if might open the floodgates to the big corporate agencies finally taking B2B separately, and building genuine centres of excellence around it, through acquisition.
In the past, the majority of big agencies had had B2B clients (sometimes very lucrative ones) but almost begrudgingly – typically they been embarrassed to admit that they’d done this work, and they’d probably fobbed these clients off with the junior creative team. They certainly didn’t want to shout about it, let alone put it on their creds. From a client’s point of view, they often felt that this was the best they could expect – it cemented the B2B as ‘poor relation’ mentality.
The explosion of growth in the B2B agency sector over the last ten years, in parallel with the acknowledgement by inhouse marketers of the advantages of working with specialists, has changed the game. Ogilvy’s move to acquire DNX (along with other rumoured acquisitions) looked at the time like the first of a wave of acquisitions of up-and-coming B2B shops, and at last a ‘coming of age’ for this long-ignored community.
Last week’s announcement suggests that genuine respect, understanding and appreciation for B2B within larger groups is probably as far away as ever. This kind of specialism simply doesn’t fit with their models, and they aren’t geared up to cultivate it.
This isn’t to say that acquisitions won’t continue to happen: but that B2B agency owners should understand what they’re getting into. They’ll have to toe the line just like everyone else – there will be no special treatment. And the best clients will probably be siphoned off.
For it’s part, Ogilvy One Business will doubtless continue to do excellent work for its roster of blue chip corporate customers – in particular IBM and BT. And the former DNX will be retained to focus on the rest… the conflict clients, and those that don’t match it’s aspirations or have sufficient budgets. What remains to be seen, however, is if this ‘whole’ (of former DNX plus Ogilvy) can conspire to be greater than the sum of its parts. Achieving this will surely be more difficult now in the absence of the acquired agency’s founders, who blazed such a trail in B2B.