Opinion

The Weekend Mumbo: M&A, AI, AO and many more letters

Welcome to the Weekend Mumbo. Here you will find a short analysis piece on something compelling that happened during the week, followed by a small collection of the biggest stories Mumbrella covered and why they are worth the read.

Welcome to the Weekend Mumbo,

This piece originally appeared on Saturday morning as an email newsletter. If you want to get it it then rather than wait until Monday, there is a box at the bottom of this piece to sign up.

The aim of this piece is the same as the previous Best of the Week – to provide you with more insights into the biggest stories of the week.

Saturday’s email gets a lot of feedback and we’ve tried to take that on board. A long missive that’s overly opinionated is too much, a quick email with a bunch of links is not enough. So we’ve landed in the middle. As ever, feedback is welcome.

Time to get stuck in.

The year of the acquisition  

The Australian media, marketing and advertising industry has kicked off with a bang. Page views on Mumbrella for the month of January to the 19th were up 11.61% YOY while average session duration increased 12.63%.

That’s been driven by some significant stories including Koala’s Prince Harry creative, former Audi CMO Nikki Warburton joining the CarExpert board (that means both her and husband, SWM CEO James Warburton, have a significant interest in the brand), Australia Post’s CMO Amber Collins departing, MLA’s new lamb campaign and Howatson+Company CCO Levi Slavin panning advertising. The last one is a terrible dad joke – sorry.

McCabe and Sefiani

But the biggest story for me was the acquisition of well-known independent PR firm Sefiani being acquired by Clarity Communications Group. Apparently, it was considered pretty big news by at least one other publication to the extent that the story got out on Monday evening, well before the Tuesday morning embargo.

Mumbrella carried exclusive interviews with both Robyn Sefiani and Clarity founder and CEO Sami McCabe so I’m happy to say you’ll get the most detailed rundown via the link above.

Industry chatter started quite rapidly around acquisition opportunities in 2023. More than one senior industry executive is sure that this will be a busy year in terms of acquisitions. When I say senior industry executives, that isn’t necessarily just agency CEOs.

There are a number of independent agencies out there across creative, media and PR, but there are a lot less great ones that would be a prime target for a larger agency or network looking to make an acquisition. Despite this, some senior execs are adamant more will be announced soon.

Two main reasons for this stick out. And I’ll make the points quickly, as promised above.

Firstly, a straw poll suggests that the majority of the industry feels that 2022 was the toughest year they have had for some time. That’s not in a profitability but in mental capacity.

2022 was the first year of near normality after the pandemic. According to the Harvard Business Review, the keyword for 2022 was ‘resilience’. “Whether it’s the economy, layoffs, war, or environmental crisis, challenges of all kinds have tested many of us.”

Other keywords included ‘quiet quitting’, ‘change’, ‘endurance’ and ‘flexibility’. These are as appropriate for business owners as they are for anyone else in society. Those who dodged previous bullets like the GFC and now the pandemic can be forgiven for wondering how many more they can or should try to dodge. Result: more of a willingness to consider offers and opportunities.

Secondly, 2022 was a disaster for some industry sectors. It was a disaster for a lot of big tech. It was a disaster on many stock markets as well. And 2023 looks like it will continue to provide a challenge economically.

Meta and other big tech struggled in 2022

There is nervousness in business circles. While Australia may well avoid recession as it so often does, rising interest rates, the predicted cliff fall for consumers coming off fixed rate home loans and the possible trickle down of budget cuts from the US and Europe to Australian marketing budgets has many watching their back.

Did I mention hiring challenges continue? The only difference now is that there is a slight question mark over the existence of some of those vacant roles down the track.

A challenged market creates a sea of opportunity in many cases. The sharks, as the cliche goes, will be circling. But also consider some recent thinking by McKinsey.

The headline is a pretty succinct way to sum it up: “New research confirms that companies that regularly and systematically pursue moderately sized M&A deliver better shareholder returns than companies that don’t.”

It seems like a good environment for M&A.

I’ll end with a bit of a side note. If you believe that one agency/network sneezes and the rest catch a cold (in other words, when one decides to press play on a merger or acquisition it motivates others) then consider the position of one of the most prolific networks of late when it comes to mergers and acquisitions – S4 Capital.

After the disaster last year of reporting delays and missing market expectations, the stock value has bounced back to be near the level it was on 20 July, 2022, the day before it shed almost half its value. It’s been a steady rise. That’s confidence inspiring, although I’m not suggesting I believe the theory of the sneeze and the cold.

The rest of the week  

The Brag will trial AI generated content. Mumbrella was first to report this one thanks to Kalila Welch after CEO Luke Girgis posted about it on LinkedIn. Not the first to do it and also not the first to say it won’t devalue journalism or journalists. But will it cost jobs? It’s hard to see it not replacing the more junior roles that were traditionally there to train journalists. The question then is, do other roles get created for that purpose?

Telstra looks to have gained significantly reputation wise thanks to the cyber attack on Optus. Darcy Song reported that Optus’ brand momentum has suffered as it witnessed a 19% fall in brand value to $3.3 billion, according to the latest Brand Finance Australia 100 ranking. The telecommunications company also saw a near 10-point drop in brand strength. The telco says it is taking steps to rebuild confidence, but whether it has affected the profitability of the business is another question. It’s set aside $140 million to cover data breach costs.

Uber Eats has shelved the ‘Tonight I’ll be eating…’ platform in favour of ‘Get almost anything’. Apparently the one thing they couldn’t get was another former world number one tennis player. Lleyton Hewitt doesn’t seem to be back on the Uber Eats roster yet as he has been previously, but The Scud, Mark Philippoussis is.

And on tennis, the ratings may have started off a bit slow, but the five set thriller between Andy Murray and Thanasi Kokkinakis kept viewers glued to their screens despite the 4am finish after five epic sets. Like Murray though, you wonder how many more late night five setters one can take before they step away.

Before I go…

I’ll leave by mentioning that we have recently added a number of great global keynotes to some of our events. MullenLowe US creative director and creative lead on Acura Ty Hayward will fly in for the Automotive Marketing Summit on 28 March in Melbourne, global chairman of Havas PR Global Collective James Wright will keynote Mumbrella CommsCon and Weber Shandwick global creative chief Tom Beckman will keynote Mumbrella Audioland.

And given the current important focus on diversity, equity and inclusion, wait until you hear about our next international speaker for Mumbrella360, which we will announce next week.

Thanks for the big ‘welcome back to Mumbrella’ that I have received from many. It’s fantastic to be back with so many huge things in the pipeline.

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