Like salmon swimming against the current, a small number of Canadian-owned agencies are resisting the global urge to merge, choosing instead to ensure their survival by acquiring U.S. shops of their own or spawning specialized services.
Among those that are well on the way to realizing expansion plans south of the border is MDC Communications Corp., a Toronto-based firm that’s parent to a whole host of integrated or specialized communications companies.
Beverley Morden, president of MDC’s communications and marketing services division, recently completed the company’s fourth U.S. acquisition in the past eight months, that of Colle & McVoy of Minneapolis, Minn.
The deal increases MDC’s revenues to CDN$150 million across 19 affiliated companies, including Toronto-based Ambrose Carr Linton Carroll, London, Ont.-based Cormark Communications and New York, N.Y.-based Margeotes/Fertitta + Partners.
About 60% of MDC’s revenues are now generated by its U.S. holdings, says Morden, who attributes the company’s rapid growth to the fact that marketers today have very different needs than they did just a few years ago.
‘Clients are no longer just shopping for an advertising agency, they’re looking for one of two things – either integrated communication services where they can buy not only advertising but also public relations and direct marketing, [or] highly specialized, unique communication services like interactive and research.’
The latest Canadian agency to launch a similar plan of attack is Montreal-based Cossette Communication-Marketing.
Claude Lessard, president of the 25-year-old shop, says that despite incredible pressure within the advertising industry to become part of a global network, the Canadian-owned shop has decided to tough it out.
‘We had to ask ourselves if we still had a future [as an independent] and the answer was yes…but there’s a price for that decision, and that is, we have to grow faster and have a larger scope than the one we have today.’
Cossette reports annual billings of more than CDN$530 million from offices in Montreal, Quebec City, Toronto, Vancouver and Washington, D.C. It is one of only two wholly Canadian-owned agencies in the top 10, the other being Vickers & Benson.
Lessard says that, historically, Cossette’s growth has been internal, prompted largely by the needs of individual clients.
Today, however, the company plans to grow by acquisition, particularly in the U.S., he says.
In Toronto, The Communiqué Group is also hot on the acquisition trail. It currently has a letter of intent before another Toronto firm, and it’s actively scouting for a Quebec agency to purchase.
Last fall, Communiqué completed its first U.S. acquisition, Hampel Stefanides of New York.
Both Communiqué and Hampel Stefanides are subsidiaries of Toronto-based Envoy Communications Group, a self-described fully integrated, digitally driven, marketing communications company.
Geoff Genovese, president of Envoy and Communiqué, says he sees growth opportunities in the continued development of the company’s new media expertise.
‘We did some number crunching and 50% of our revenues are now tied into e-marketing.’
Purchasing an agency on the West Coast of the U.S., with close proximity to Silicon Valley, would give the company ‘a great foundation to build on, to solidify our electronic capabilities and reputation,’ Genovese says.
