Ben Lilley on his return, acquisition strategy and making McCann ‘the best creative agency’ in Australia
In his first interview since returning to McCann as its new owner and creative chairman, Ben Lilley spoke with Mumbrella’s Zoe Wilkinson about coming home, burn out and his new acquisition strategy.
When Ben Lilley walked through the doors of McCann two weeks ago, he felt like he was home.
After departing the agency two years ago as CEO and creative chairman, Lilley felt the need to “re-engage [his] business brain again” so he reached out to McCann Worldgroup global CEO Harris Diamond.
“I literally emailed Harris Diamond out of the blue and said, ‘Hey, I made a mistake. I shouldn’t have left. I left too soon. I miss you. Can I come back? And, also maybe there’s an opportunity to buy my agency back?’” Lilley recounts.
“And so the conversation kind of went from there.”
Lilley says he left McCann too soon
Lilley’s company, Brucie Baby Proprietary Limited (named after his late father), is the sole owner of McCann Worldgroup Australia. The agreement gives McCann Australia the freedom of an independently owned and run business, but the agency remains a member of the network with access to the global resources and clients.
Lilley says the arrangement gives him and the agency ‘the best of both worlds’.
“There are so many fantastic benefits of being in an independent agency, but there are so many other brilliant benefits of being part of a network and it’s very unique for us to be able to combine those two now into a single national Australian operation,” he says.
Lilley could not speak to the price or details of the acquisition, and while it is likely some staffing changes will occur, he would not comment on any structural changes to that effect for confidentiality reasons.
Lilley’s goal is to make McCann a ‘tier one Australian creative agency’ in a ‘cut-throat’ market. He believes adland is currently lacking a full service creative leader.
“I just don’t think there are many standout creative agencies right now, and I think there’s a lot of agencies that aren’t necessarily even clear on what their creative proposition is,” Lilley says.
“I unashamedly want McCann to be the best creative agency.
“A great creative agency is a competitive advantage, or a bit of a unique positioning in a market where you have many creative agencies who are actually spreading themselves perhaps too thin, trying to do too many other things, or trying to be too many other things.
“And so that’s what I’m excited about because I don’t really see any of the kinds of players that perhaps we’ve seen in the past where we had some really strong dominant creative agencies historically in Australia, and I don’t really see anyone being a kind of dominant creative player in that regard.”
Lilley is firm in his belief that McCann will continue to live by its global mantra of ‘Truth Well Told’, and global creative chairman Rob Reilly’s personal motto of ‘Creativity is the only way to survive’.
The Australian operation will continue to operate as a member of McCann Worldgroup and live by the mantra ‘Truth Well Told’
Despite his claims that he doesn’t have any “radical strategic plans or radical business,” he is now entering an acquisition strategy to reinforce McCann’s capabilities with the addition of independent agencies.
He says this is the most effective way to scale the business. Building the agency organically, Lilley says, is risky – “the smarter play is to buy, rather than build”.
“I think that we can continue to be a better agency for our clients if we can continue to get better in every area of our integrated offering,” Lilley says.
“And by finding really strong local, independent competitors who are already doing that, and by being able to integrate those into our full service creative offering, then that just allows us to do an even better job and get even better results for our clients.”
He is looking to acquire agencies across the field of adland from media to PR and like many agencies going through the acquisition process is looking to deepen the digital and technology offering. However, Lilley is particularly interested in agencies with widespread capabilities.
“I also think that the very best creative agencies now have to be digital to the core and, and have to have a strong technology offering as well,” he explains.
“So really, I’m just looking for other great creative agencies that might want to become part of McCann and have all the benefits that come with being part of the multinational network while also being still being an Australian independent.”
This is a similar strategy to how he built his agency SMART, which he sold to McCann in 2011 making him the CEO.
Lilley’s first acquisition for SMART was digital agency M4 Interactive in 2001. During the Global Financial Crisis in 2007 and 2008, while the industry took a hit, Lilley was out there expanding SMART with the acquisitions of creative agency VCD/Kindred, retail specialist The Foundry, digital agency Illuminati, Turner Sands and Logan Meo Walters.
During his first stint at McCann, Lilley acquired PR agency The Red Republic in 2016 and design agency Studio Woo in 2017.
To Lilley’s knowledge, he is the only player currently in the market looking to acquire agencies, and he is propelled by the tough economic conditions faced by the industry.
“It’s a great time for us to be on the acquisition hunt, as there’s nobody else for agencies to sell to right now. And with the dark economic headwinds our industry and global economy are facing, I don’t think there will be any other agency buyers in the Australian market for at least another couple of years,” he explains
“So I’m encouraging anyone who may be thinking about me selling their business to contact me now, as we also only have a limited amount of capital to invest and I want to be able to speak to the best possible businesses for us.”
Lilley wants adland’s independents to know that if they are interested in doing business with McCann they can contact him directly on LinkedIn – one of McCann’s clients.
Lilley built his agency SMART through acquisitions during the Global Financial Crisis
As for his two years away, Lilley says that he came away from it with “liver damage”, “a couple of extra kilos” and a better respect and understanding of burn out culture that is rampant in the industry.
Lilley realised during his time away his decision to leave the industry in 2018 was “impulsive” and due to the fact he was burnt out.
“I thought I was done and that it was time to leave the industry into something else, and what I realised is I wasn’t done. I was just a bit burnt out, and I actually probably didn’t even need to leave I just needed time away to take a bit of time out and refresh,” Lilley explains.
Lilley says he will take what he learned from his own experience into the management of McCann.
“I’ve never been an 80 hour week kind of person myself, and I would never want anyone else in our business to feel that that’s the pressure or expectation, especially for me having been able to have such a kind of rare privilege,” he says.
“I’m incredibly fortunate to have been able to take those two years off, just spend that time with my family.
“I would encourage anyone and support anyone in our business who wants to spend to be, to be able to get that really good balance between their career and their family.
“You know, I’ll support them however they can to make sure that they’re doing that, and that they are able to always put their families first.”
Finally, when asked about the ideal client he would like to win in the next 12 months Lilley said five came to mind, but asked to think about it. Several hours later he gave a diplomatic response via email:
“My next dream client for McCann is any marketer who believes, as we do, in the power of breakthrough creativity to deliver breakthrough results.
“There are so many brands that I and our national teams would love to work on. But the success of every brand, and of every client-agency relationship, comes down to the mindsets of the client and agency themselves. We’re passionate about the effectiveness of creativity and want to work with clients who share this conviction.”
Easy for this to be the worst of both worlds too, I would have thought.
How will local vs global client conflict be managed?
As for the capability build/acquisition strategy, all very well, but surely the IPG portfolio managers will hardly support McCann dialling up its competition with IPG sister agencies like Weber Shandwick, Mediabrands, Futurebrand et al.
It’s complicated enough when you’re trying to get the sister companies playing nice together. Harder still when there is a clear conflict of commercial interest within the family (above and beyond the usual revenue jealousy).
And just from a straight out brand authenticity PoV, can you really be an “independent” if you’re McCann…? Really?
Prediction – this is a transition step to a new brand for the agency. Or at least it will become that way once all the complications surface.
Interesting read and very interested to see the success of smart and McCann can be replicated all over again. Don’t disagree with the comments about the current state of play in the industry right now – the market’s wide open.
All fair questions, so I’ll answer them here (but if you’re genuinely curious, get in touch via LinkedIn and I’m happy to answer any and all other questions you may have):
“How will local vs global client conflict be managed?”
McCann Australia’s working relationship with McCann Global, IPG and our clients hasn’t changed – only the ownership has. Our contractual obligations remain unchanged. So if any conflicts were to arise, they’d be managed in exactly the same way they always have been across the group.
“As for the capability build/acquisition strategy, all very well, but surely the IPG portfolio managers will hardly support McCann dialling up its competition with IPG sister agencies like Weber Shandwick, Mediabrands, Futurebrand et al.”
We’re not adding any new offerings we don’t already have at McCann, so no not this is also not an issue. We already offer media planning and buying, PR, design etc, under our integrated creative umbrella, as do most other creative agencies. We are and will remain a creative agency first and foremost, but we want to further grow these services to offer the very best integrated solutions we can for our current and future clients.
“And just from a straight out brand authenticity PoV, can you really be an “independent” if you’re McCann…?”
Yes you can and we already are.
“Prediction – this is a transition step to a new brand for the agency.”
Our agency offering and proposition is entirely predicated upon us being a part of the McCann network. As a McCann agency we have the benefit of the global McCann Truth tools and studies and all other McCann and IPG network support, resources and IP. And we get work on brilliant global accounts like Coca Cola, CPW, eBay, MasterCard, LinkedIn, L’Oreal, Menulog, Microsoft and Nestlé. This is why I bought the business. We’d lose all these benefits if we ceased to be part of the McCann network. So no, it wouldn’t make any commercial sense for us our our clients or our staff to adopt a new brand for the agency and lose all this when we can operate as part of (and I obviously say this without any bias whatsoever) the world’s greatest global agency network.
Congratulations Ben, looking forward to seeing what happens from here.
Eight years ago I mounted a very public campaign about the ageism I was facing in trying to remain in the industry. At the time Ben had just taken the helm at McCann and a post defending his stance on ageism as being perfectly OK. The post was met with a huge amount of vitriol from both clients and agencies.
Here’s the post:
https://mumbrella.com.au/am-i-ageist-or-a-realist-64839
At the time I did ring Ben and we had a vigorous discussion where we agreed to disagree.
I went on to consult to both agencies and marketing teams for a few years and met some incredible people who were looking for a depth of experience and range of skills that were in short supply.
Along the way, I found a new passion and have taken many of my skills and applied them in a totally new direction, leaving the industry behind after more than 30 years. Sadly, the industry loses many like me at younger and younger ages as many ageist views still remain.
I do hope that Ben’s regret in walking away from the industry has seen his views of hiring a diversity of talent undergo change. The people hired should be, regardless of age, the best people for the job.
Recent redundancies and resignations at McCann may be an indication that yet another reinvention of McCann has its casualties. Hopefully, they are not a result of Ben’s previous ageist stance and he has moved on as he now pushes 50 himself.
Best of luck to him. It’s great to hear someone talking so ambitiously about our industry and putting creative at the centre of it. And he’s putting his money where his mouth is. Bring it on.
“It is smarter to buy than build… ” reading it next to “culture that is rampant in the industry”
Nothing aligns here, except the short term thinking of the agency leaders that has been spreading like a plague on this slow dying industry.
Thanks for replying Ben – and there’s plenty of goodwill out there towards you so best of luck.
I suspect lack of complete local autonomy on the conflict thing will be hard. It flies in the face of an “independent” value proposition in my view.
On the portfolio side, I still suspect that if you start getting “too successful” at the expense of other IPG companies, push will come to shove as I assume the mothership sees a lesser margin outcome for business that goes through McCann vs a wholly owned entity. And that if you’re successful in realising your vision, that it a highly likely outcome – eg Thinkerbell’s success in winning so-called integrated business. Maybe the answer is to focus on bits of the IPG offering that are (a) shit here, and (b) valuable differentiators/capability builds…
Still. Good luck to you.
Just a pity you’re joining the ranks of the real independents 😉
Ben thanks for being so open – although that client list is a little hopeful. Are all those clients with McCann in Australia?
Could you also please let us know whose money it is you’re using to buy the independents?
A very tenuous link and attempt to resurrect a dead issue Tony.
This news has nothing to do with you or the ageism debate of nine years ago.
Thanks for your interest.
Firstly yes these are all global McCann clients who are also contracted McCann Australia clients. In Sydney it’s: Coca Cola, CPW, eBay, MasterCard, LinkedIn, Menulog, Microsoft and Nestlé. And in Melbourne L’Oreal. I realise this list looks almost too good to be true – I thought so myself when I first joined McCann! Most of our clients run agency rosters so we’re certainly not 100% engaged on every brand and account and there are other very good agencies who also work on each. But they’re all active and current McCann Australia clients.
We obviously also have many other fantastic Australian clients across our Sydney, Melbourne and Queensland offices. But the full list is too extensive to include here and is frankly always changing (occupational hazard!)
On the qustion of acquisition funding, it will depend on the specifics of each. At SMART we had a commercial lending facility specifically for our M&A activity with Suncorp, who were great supporters and who we enjoyed an excellent relationship with. At McCann our previous acquisitions were all self-funded. It will really depend on the size and metrics of each.