The Case
When Magnet Interactive first began working with its PR agency, Upstart Vision Inc. (UVI), the company was a 150-person design, production and strategic marketing shop. And
although Magnet maintained nationally recognized accounts including Kellogg's, Crayola, DuPont and the Mayo Clinic, it was primarily a local organization with a strong reputation
in the Washington, DC area.
As success with major accounts grew, Magnet execs realized they needed global partners and significant cash infusions to continue growing the company. They turned to UVI to
help them increase recognition of their corporate brand and to get the word out that they were looking for a buyer.
UVI responded with a media relations campaign that targeted influential business publications on both the national and local levels. Coverage included an interview of Magnet's
COO in the Washington Business Journal, The Washington Post's tech column, and a story in Ad Age in which Magnet's CEO put the word out that the company was seeking strategic
business partnerships. The story hooked an acquisition deal which ultimately made Magnet part of AKQA, a roll-up of creative agencies in New York, London and San Francisco. The
roll-up was funded with $71 million in venture capital from Francisco Partners, a San Francisco-based venture capital firm.
While the acquisition was a tremendous success for Magnet - and the ultimate return on its public relations investment - it left Magnet's partnership with UVI up in the air
with UVI's leadership wondering whether their relationship with Magent would continue following the acquisition and what the new company would look like.
Magnet entered a dark period from January to May this year. "We didn't know who the acquirer was. As a midsize agency that does PR for a lot of startups, you're never sure if
you'll be the boy on the dock waving as the ship sails," says Mike Smith, UVI's president.
Once Magnet emerged from the dark period, it became clear that AKQA Washington would continue working with UVI and the two companies faced the challenge of reestablishing their
relationship with new partners, new rules and a whole new set of goals.
Getting to Know You -Again
Upstart Vision continued to work on building local recognition and generating sales leads for AKQA Washington. But those PR efforts occurred in the context of a larger
company's branding initiatives. Smith's concern was that "the Washington office stayed active in its own [communications] but still followed the spirit and the letter of the
merger agreement."
The announcement of the roll-up deal had been issued with a New York/San Francisco dateline, and while Magnet was named in the release, it wasn't prominent. Looking back, Steve
Marino, managing director of the Washington office says, "it might have been smart to localize the global release. If we had coordinated our four offices and respective agencies,
the announcement could have had four versions [tailored for separate markets]."
AKQA Washington challenged UVI to ramp up its reputation within the context of the larger organization - whose stakeholders (in the design community) considered the company's
other locations, New York, London and San Francisco, sexier than the DC locale.
"Working with three partners, we cannot speak for the entire organization the way we would if it was just Magnet Interactive," Marino says. Although AKQA Washington leads the
way on the organization's communications on all things Web-related, UVI now has to coordinate many PR initiatives within the framework of the other offices' agencies. For
example, when a recent AKQA Washington release was picked up by the Dow Jones Newswire, Smith and his team took the lead in communicating with the other partners' agencies of
record to ensure that they were aware of the release and in agreement on how to handle the messaging.
Results
While many changes - even administrative issues like the billing cycle- have caused bumps in the road, UVI and AKQA are adjusting well to their new roles. UVI now works on a
retainer, rather than on a project basis, and the two companies are ramping up PR initiatives designed to position AKQA Washington as a major player - internally, locally and
globally.
(Contacts: Steve Marino, AKQA, 202/625-1111; Mike Smith, Upstart Vision, 703/742-6482, [email protected])
Odd Man Out
Industry consolidation often means redundancy. Usually this means someone has to go. These guidelines can simplify the choice:
Evaluate all agencies involved based on how useful they have been during the acquisition process. An agency that has been actively engaged in identifying and courting potential
partners has a clearer concept of where the newly combined organization will go.
Hang on to a relationship with an agency that knows your product or service. An agency with a clear understanding of the value your company brings to a partnership can be
indispensable in establishing communications for a combined organization.
Once the choice is made:
Make sure your agency has a clear understanding of both sides of the business - the purchaser and the acquired target. Explain in detail what the new partner is looking for and
how communications can serve all the parties.
Keep your agency in the loop on internal changes - everything from new billing cycles to changes in employee morale to changes in the management team's personality is important
for the agency to know.