Like The Monkeys sale before it, independent agency The Works’ decision to sell to digital consultancy RXP Services for a reported $35 million on Tuesday has sent the proverbial ripples through adland.
However, according to The Works’ co-founder, Damian Pincus (right in photo), independents baulking at a merger with traditional comms businesses in favour of consultancy firms will become the new norm, or as Pincus puts it, the change the local advertising industry needs.
Speaking to B&T about The Works’ merger into RXP, Pincus confessed the decision to sell was actually an easy one and was all about ensuring the agency’s future.
“From our perspective it was all about future-proofing our business. The most apparent thing with (the sale to) RXP was thinking about the business in 10 or 15 years and we had a sense of what that could be and talking to Ross (Fielding RXP’s CEO) and the team there was a genuine passion from their point of view and a genuine fit.
“Both of us saying, ‘This is what the future looks like’ and us working together we felt we could genuinely deliver that future,” he said.
For the time being, or the next two years at least, Pincus said that The Works and RXP will continue as is. The Works remaining bunkered in its North Sydney headquarters.
“Our industry has been desperate for change,” Pincus said. “And I think the big multinationals have skirted around the edge of change.
“What these new, I’d call them digital transformation or innovation businesses, whether it’s Deloittes, PwC, RXP or Accenture, they’ve been doing a lot of this work for clients already and all we’ve seen is more and more of the overall marketing and innovation spend is going into that space.
“I think the growth of this area is coming from the clients driving the agenda and it just makes complete sense that if businesses like RXP have been doing that for clients for many, many, many years then having a business like ours, which is probably a lot more consumer facing in their armoury, makes it so much easier for any client.
“Clients’ worlds are getting more complicated and they want an easier life and an easier life is dealing with the one company that can deliver every bit that they need in that transformation process,” Pincus said.
He also believes the synergy between the Australian-owned RXP and the Australian-owned The Works makes the deal different to say that of Accenture’s recent acquisition of The Monkeys. Pincus added he would have been reluctant to sell to one of the multinationals who, too often, buy independent agencies only for them to be “sucked into the mothership and never heard of again”.
“I think The Works being bought by RXP is different to say an Accenture or a PwC and that is RXP is an Australian business, I see it as an amazing Australian company and we don’t have to answer to anyone overseas, we don’t have to get anyone in New York to approve if we can or can’t spend money to do what we want to do,” he said.
“We have always worked at building a strong local business in Australia and working with Australian clients to build their business and I think that’s the difference in this deal,” Pincus added.