Photon Reveals Big Ambitions For Naked
Sydney Morning Herald
Thursday February 7, 2008
PHOTON GROUP'S executive chairman, Tim Hughes, signalled plans to create the strategic media and communications equivalent of the international management consultancy McKinsey & Company after Photon's $36 million takeover on Tuesday of the London-based firm Naked.
Founders of Naked were in Australia this week for the sale of the renegade international communications planning outfit, and hurled criticism at the suffocating management cultures of the four dominant global marketing services conglomerates and their attempts to prop up dying ad agency business models. Mr Hughes backed the founders of his new division, saying global giants such as WPP, Omnicom, Publicis and Interpublic, which control worldwide corporate marketing budgets worth upwards of $150 billion, were trying to keep old advertising agency structures from imploding by "bolting on" diversified services.The chief executive of Naked, Nigel Long, said his company had become increasingly frustrated with the large global marketing services groups after a series of approaches to buy the business."Photon is refreshing because other holding companies are looking at communications planning as the great white knight to sew together their legacy advertising business models," he said. "If you look at the way the holding companies have built themselves, they are very advertising-centric. The problem with those traditional groups is, they've seen us as a way of pulling their legacy business together and taping over the cracks. "Every time we spoke to them we could see what was in it for them but all they were going to do was mess with our model and make us cross-sell, and potentially make us part of some other dinosaur agency group. With Photon, nothing changes. We want to build a great global business as independent advisers with impartiality." Mr Hughes said there was an opportunity for Naked to become the next McKinsey or Bain & Company in media and communications and Photon had allocated an initial $5 million in working capital for the establishment of new offices - Shanghai, Beijing and Mumbai are at the top of the list. Further expansion in Europe and Latin America was also on the table. "Our internal budgets are $5 million but we'll give them whatever it takes," he said. Although Naked is Photon's biggest single acquisition since it started in 2002, Mr Hughes said the Australian field marketing group, once owned by Photon's chief executive, Matt Bailey, would remain the biggest single profit contributor in the current financial year. The Bailey Group has also embarked on expansion in Britain after landing an in-store merchandising contract with Marks & Spencer. However, Jon Wilkins, one of the founders of Naked, said Naked's biggest growth curve was ahead of it. After years of corporate rhetoric, he said, sweeping changes were under way among multinationals to appoint independent, "neutral" media and communications strategists to advise on how and where marketing budgets were spent. "We are not overly cocky, but the world is coming our way,"Mr Wilkins said. "We think the big corporates are going to use independent consultancies to help them through the minefield of modern communications. They're moving away from putting their trust solely in advertising-centred agencies models. We are incredibly bullish because all the big blue-chip companies are talking about IMC [integrated marketing communications]."
© 2008 Sydney Morning Herald
Share This