Core Media eyes PR takeover as revenue hits €225m
Ireland's biggest media buying agency, Core Media, is looking at acquiring a public relations firm here as part of its push to become the first full-service agency in the country, according to chief executive Alan Cox.
That move could put a number of independent PR firms in its sights.
"We are interested in acquisitions that will strengthen our value chain," Mr Cox told the Irish Independent.
Core Media - which expects to generate profits of €4m this year on revenue of €225m - is 16pc-owned by French media giant Publicis, and the remainder by management.
Core Media employs 279 people in Dublin, and its chairman is Greencore chief executive Patrick Coveney. Its brands include Starcom, Mediavest and Zenith Optimedia.
Around the world, core agency activities such as buying, PR and design have, by and large, been split between different firms for a number of years.
But the mood music has once again shifted towards integration. "By 2020 we want to be a full service group," said Mr Cox. "We are on a path towards that."
He said he didn't want the group to become a collection of siloed businesses.
"It's not just enough to provide services," he said. "The big challenge is collaboration and integration. We're spending a lot of time and effort in finding ways to collaborate internally."
Mr Cox said any acquisitions Core Media make won't be in the creative space.
"If you acquire a creative services business, there can be significant barriers from a culture perspective," he said.
"You have to get the cultural fit right. If you don't, it's an absolute disaster. The world is littered with examples of mergers and acquisitions that failed because of cultural barriers."
That side of its growth will be organic, he added.
"We would look at the PR area (in terms of acquisitions), and other areas including shopper marketing. They would certainly be two that would be of interest," said Mr Cox.
Some of Ireland's biggest PR firms are already owned by international groups.
Drury Porter Novelli is owned by US-based giant Omnicom.
The Ogilvy & Mather Group, whose units here units include Wilson Hartnell PR and activities by its global ad agency Young and Rubicam, is almost entirely owned by global giant WPP. US public relations giant Edelman also has a sizeable Dublin office.
But there are plenty of other PR firms that could be of interest to Core Media.
Mr Cox said Core Media is moving towards a model that would embrace some of the McKinsey way of servicing a client, becoming consultants to them rather than just providing what they might perceive to be a basic service.
"We want to be a real driver of growth for our clients' businesses," he said.
Mr Cox said that he is "really happy" with the current shareholder structure of Core Media.
"Publicis is a brilliant global network and we are a full member of that," he said. "They're a vital partner to the business and we have no wish for that to change, and no ambition at the moment to sell the business or for Publicis to take it over."
"We feel we have a really good business model at the moment, which combines being part of that international network with an owner-managed ethos which allows us to invest."
Read More: Alan Cox interview