Date posted: July 5, 2012
by Herman Manson (@marklives) Draftfcb has acquired independent digital agency Hellocomputer. The move follows widespread industry speculation that the two parties were about to announce a deal. A letter to clients went out this afternoon at 15h00 while staff was informed at about 15h30.
Hello Computer was launched in 2005 by its ECD Mark Tomlinson. Draftfcb’s digital arm Mesh Interactive will fold into Hellocomputer taking the agency to a total of 80 people in Johannesburg and Cape Town. The Hello Computer name has also changed format to Hellocomputer. The size of the deal has not been made public.
MarkLives asked John Dixon, CEO at Draftfcb South Africa, what the deals means for his agency.
MarkLives: Please explain the strategic thinking behind the purchase of Hellocomputer?
John Dixon: Draftfcb was an early adopter when it came to having a digital offering – as way back as the early 2000s. Our latest incarnation, Mesh Interactive, has grown into a strong, medium size agency employing over 40 people.
However, from our point of view, the last two years have seen the digital channel really take off amongst our client base and there is now real and sustained demand for digital amongst both our Johannesburg and Cape Town clients.
The Hellocomputer deal gives us an immediate footprint in two cities and we scale up from two mid-sized agencies to a large one immediately.
Hellocomputer’s reputation as South Africa’s most creative digital agency as well as a shared vision for the future of digital communications was the motivation behind the deal.
We already share a number of clients, and they will feel the effect of a more integrated way of working immediately.
MarkLives: To what extent will Hellocomputer be integrated into Draftfcb and will the brand be retained?
Dixon: The Hellocomputer brand will be retained and Mesh will take on this identity with immediate effect.
A key reason for our interest is the strong culture that exists within Hellocomputer and the company will therefore continue to trade as a specialist digital agency, but within the Draftfcb family.
Hellocomputer will however be strongly integrated into the Draftfcb strategic and creative process and to assist this, will ultimately be housed within its own separate wing of both the Draftfcb Johannesburg and Cape Town offices.
MarkLives: What is the value of the transaction and will there remain any minority shareholders left after the purchase?
Dixon: Company rules prohibit us from disclosing the financial details of the transaction unfortunately, but IPG South Africa (Pty) Ltd will own 100% of the entity.
MarkLives: Will the management of Hello Computer be maintained as is?
Dixon: Indeed. The executive management is one of the key reasons for doing the deal from our point of view. They will report directly into the Exco of Draftfcb South Africa.
MarkLives: How will buying a digital agency outside of Draftfcb contribute to creating a digitally adept culture within Draftfcb, or is this not the purpose of this specific deal?
Dixon: Draftfcb South Africa has for a long time invested in making our agency more digitally-savvy. It is impossible to produce integrated communication without a consideration for web and mobile. That said, the digital landscape is evolving so rapidly that we need to constantly invest in education and in driving a digital culture.
We have experimented with incorporating digital within the traditional agency, but prefer at this stage to honour advertising and digital as specialist offerings and to work hard at how we collaborate on specific tasks. This will in all probability change in the medium term.
MarkLives: How will the purchase of Hello Computer impact the staff and revenue figures of Draftfcb in South Africa in both the short and the longer term?
Dixon: Again, I can’t disclose numbers but the new Hellocomputer will immediately have over 80 people nationally and will be in the top five digital agencies in the country by size.
Draftfcb South Africa is a subsidiary of the NYSE-listed Interpublic Group (IPG).