Why demand for B2B agencies is at an all-time high

JTOne of the major industry themes you’ll no doubt have seen across the past year has been network groups posting substantial losses, with WPP among those who have been hardest hit, recording a £2.8bn pre-tax loss for 2020.

However, what you might not have noticed is how well the B2B agencies are flourishing through these tough times, with the best ones posting anywhere near as high as 30%+ growth year-on-year. We ourselves saw our turnover increase from £3.5m in 2018 to £9m last year. And that is only increasing.

And, because of this disparity, there has been a feeding frenzy of acquisitions as those frightened networks try to bolster their books by snapping up a host of tasty B2B agencies.

Earlier this year, Publicis Group bought Octopus, last week saw MSQ B2B bringing MBA into their ever-expanding stable while last year Accenture bought Seattle based B2B proposition, Yesler.

So why then, do the networks and consultancies at the top table always seem to get the integration of those businesses so wrong?

One thing’s for sure, it isn’t down to what they’re buying. B2B agencies are perfectly built for these tough times. Their client base tends to be tech, SaaS and fintech; all businesses that flourish when the pressure is on.

Because of the radical evolution of this client base, they have to adapt and evolve themselves to meet those increased client demands such as more in-depth expertise; easier structures to deal with and true collaboration with essential strategic; technical, digital and creative skills.

Add to this that B2B agencies had to become early adopters of digital transformation, meaning they know how to get the most from their clients’ mature marketing stacks and banks of high-value big data that they are applying to their annual marketing strategies, all adding up to make a formidable – and a very tempting – offering.

Also, when you look at the top factors influencing acquisitions last year: gaining access to skills and talent (70%), followed by gaining access to emerging technologies (66%). The priority criteria acquirers are looking for are growth (90%), profit (57%) and client spread (40%) according to Credit SI – it’s tick, tick, tick, tick and, you guessed it, tick on all fronts.

Even clients are singing their praises. Just last week this very title posted a story stating that “8 in 10 (82%) marketers see B2B as a vital driving force for new business, with most (93%) considering or already activating digital ad campaigns”.

To be fair to the networks it has been a tough year. But this problem of not being able to utilise the B2B businesses they buy is nothing new.

DNX was obliterated by Ogilvy, Gyro was diluted into Dentsu and let’s see if Yesla ends up on the Accenture trophy cabinet alongside Droga 5 and Karmarama. History dictates it will. If anything, the massive losses and pressures of last year, have only exacerbated the problem.

In short, the networks are going through a crisis of confidence and rushing out to buy the first flashy thing they see to make them look and feel good again, even if it doesn’t fit.

On the other hand, B2B has come of age, matured and grown in confidence. The demand for fierce thinking, dynamic, independent B2B agency models is at an all-time high. With that in mind, I would strongly urge people in our industry to focus their time and energy on continuing to meet the needs of our clients head-on and beware of chasing the rainbow.

Jason Talbot is managing director of The Croc

Print Friendly

Be the first to comment on "Why demand for B2B agencies is at an all-time high"

Leave a comment