Until three months ago, I’d barely heard of marketing services group Next 15. I was vaguely aware that it included ABM tech vendor Agent3, as well as various agencies, but little else. However, over the summer the acquisition of two B2B agencies I know and respect (Velocity and Circle Research) put Next 15 firmly onto my radar, and the more I probed, the more interesting the company started to sound.
The agencies within the group are a fairly diverse bunch, but there did seem to be a B2B tech bias – including Twogether. The group CEO Tim Dyson is a Brit, but is based in California, and he’s also been a director of PR agency Text100 (who were also part of the Next 15) since the mid-80s.
Beyond understanding the background to the recent acquisitions, my interest was two-fold:
- Having watched the credit-fuelled ‘agency-consolidation-without-strategy’ game self-destruct in the noughties (B2B Marketing sub-let from Loewy Group for the first two years, but there were others at this time), I was eager to find out if Next 15 had a more robust and reasoned strategy, or whether it was just history repeating itself.
- In my first job as junior reporter writing about IT in financial services in the early 1990s, I had to deal with Text100 a lot… and at the time, I must confess that my experiences weren’t always positive. The words ‘arrogant’ and ‘entitled’ often seemed appropriate – didn’t they know that it was our job, as journalists, to be the arrogant and entitled ones? The general ethos seemed to be that we (the journalists) should be grateful for getting the story – but given the all-powerful status of Microsoft (a Text100 client) at the time, it’s possibly not difficult to understand why they took this approach.
So I was curious to understand whether this stance was one that was embodied by the directors of Text100. Having spent 40 minutes on the phone with Tim Dyson, I’m fairly convinced that it isn’t! In conversation, he was charming, amusing and insightful in equal measure, and remarkably free of corporate speak (I’m indebted to Kirsty Gilchrist from Twogether for connecting us up).
So, where has Next 15 come from? Tim readily attributes much of the reason for its success to the lessons he and his colleagues in the leadership team at Text 100 learned working with Microsoft in the UK – this included creating a bridgehead into the US. “We realised very early on that the technology world is very US-centric, not UK, and that if we wanted to be part of the tech world, we needed to build a business [in the US],” says Tim, who personally made the move to California in 1995.
Tim says initially the group structure emerged as a result of spin-offs from Text 100 (including Bite PR in the UK) – the opportunity to begin building a like-minded group of collaborative businesses through acquisition only emerged in the noughties. “Previously we were ‘playing the game with one club’ – meaning that we weren’t able to move fast enough, and we were missing out on talent. We felt there was an opportunity to build an agency group that wasn’t like WPP.”
Talent retention the key to success
Tim repeatedly describes access to talent, and the ability to retain it, as one of the major virtues of the group structure. “Technology is all about considered purchase, therefore, industry knowledge is extremely valuable. Whenever we look at an agency as an acquisition target, we ask ourselves how rigorous they are about talent and customers.” Wider group opportunities enable Next 15 to move key personnel within group companies, he claims, rather than losing them.
He says this is a lesson that Next 15 has not just learned from its earlier US acquisitions, but also from the US tech industry more widely. “Culturally, the tech industry is remarkably non-hierarchical. In Facebook’s HQ, for example, you would struggle to work out where the exec team sit. We run our businesses like that, and the group function like that. Everyone is empowered. Time and speed are the key commodities.”
So, what’s the overall plan for Next 15? Is there an optimum size that Tim wants to grow it to? “Not really,” is his surprisingly frank answer. He describes the source of funding for acquisitions as, “organic – we’re creating lots of cash through the business, and so fund some acquisitions that way. We do have access to external funding and debt when required, but keep it below 1x EBITDA.”
Artificial intelligence needs to be embraced to survive
I asked him if the centre of gravity for the group is currently in the UK or US, given the recent acquisitions. “In terms of size of agencies, we’re bigger in the US. In terms of the number of agencies, we’re bigger in the UK. Our UK acquisitions are all agencies with growth potential in the US. They could do it themselves, but they will do it faster with our help.”
However, the inclusion of Agent3 within the group looks like the shape of things to come. Tim says: “I expect we’ll acquire more martech in the future – things like AI are coming, and unless we embrace them, we will get left behind.”
Whether by pragmatism or design, Next 15 has emerged as one of the most interesting players in the B2B space, and it will be fascinating to see what it does next and how its strategy will continue to evolve. Right now, Sir Martin Sorrell probably isn’t losing any sleep… but that may not last forever.
