Marketing investments: Privately-owned publicity

John Bakie
14 June 2010

Tweet
Facebook
LinkedIn
Google plus
Send to

There is an old saying that any publicity is good publicity. This may hold true, but with several private equity investments in publicity-focused firms this year, is publicity good business? John Bakie investigates

As the economy improves, companies' marketing and public relations departments are buzzing with activity, as firms vie to attract consumers who may be feeling a little more confident following a difficult few years. The sector also seems to have been relatively unaffected by the market downturn. Figures from Kingston Smith W1, an accountancy firm, suggest the marketing segment was one of the strongest performers during the economic downturn. Its Marketing Monitor report suggests operating profit per head increased to £17,123 by December 2009.

Private equity seems to have taken an interest in this surprisingly resilient sector, with four PR and marketing deals since the beginning of the year. One of the biggest deals in the sector was that of Bigmouthmedia, which was purchased by Carlyle Group in December 2006, and merged with LBi International in February this year in a €40m deal. The merger with LBi is the second bolt-on for Bigmouthmedia, and both firms specialise in digital marketing and online content.

Quilvest opted to invest in a very different marketing proposition, providing €4m of funding for Vanksen last month. Vanksen provide "guerrilla and buzz marketing" for its clients, which include major brands such as Disney and Coca-Cola. Meanwhile, Scope took a majority stake in Brand Factory in January. Brand Factory helps clients with less conventional forms of marketing, using branding on vehicles, banners, clothing and wrappings.

Interestingly, all these firms focus on helping brands to market in different ways from more traditional television and print advertising. Private equity clearly sees opportunities, not only in the resilience of the sector, but in the ability of young, innovative companies to help major brands market themselves in the 21st century.