Why strong PR is the missing ingredient in successful agency exists
How well executed strategies help advertising and marketing agencies working towards investment or an exit.
Advertising and marketing agencies have been on a trading rollercoaster over the past three years.
Post Covid, agency business was booming. Organic growth boomed and so did the appetite of marketing groups to do deals, fuelled by buoyant numbers and lofty projections. As an agency boss at that time, it felt as if we were over the worst and the future was overwhelmingly positive. In 2022, Moore Kingston Smith’s media and marketing services M&A tracker recorded a staggering 451 marketing and advertising agency deals in the UK alone, higher than any of the previous pre-pandemic years.
The following 24 months presented a very different story. With the shadow of war in Europe and the Middle East, geo-political instability led to macro-economic nerves. Alongside this, the rise of AI and talk of consultancy services being wiped out by bots fuelled nervousness. Agencies working hard on their three-year exit plan found values diminishing. By 2024, agency deals had dropped by 13% and so far this year, Moore Kingston Smith reports 346 deals, down almost one quarter on 2022. Agency owners preparing an exit strategy in 2025 need to consider much more than ensuring their financials are in order.
As service-based SMEs, most of the UK’s marketing and advertising agencies focus on new or existing client income growth rather than a 360 view on value at exit. Apart from the big networks, the creative SME sector can be guilty of “cobbler’s shoes.”
The good news is that marketing agencies are, well, good at marketing and mistakes can easily be corrected just by aligning a proactive communications strategy with the preparedness that goes into a business sale and founder exit.
Let’s take a few examples from the sale playbook of most businesses.
Market Position, Future Opportunity and Resilience
Attracting the right buyer needs more than a glossy Memorandum. Having a clear position (the more focused the better) and a well-structured market opportunity is critical to value creation.
A good communications strategist can work with the founding team to hold up a mirror to what’s being offered. They can help you refine the story of your agency, mission, growth trajectory and market relevance. Good comms people seed so many of the stories we read or watch and are behind many of the conversations we all take for granted.
Getting an external expert to help you devise a clear and compelling position, means your business becomes more attractive than the next.
Processes and Owner Dependence
It seems that often in the marketing and advertising industries, the founder or owner of the business has been the primary spokesperson or storyteller from day one. There may well be an excellent management team in place working hard to drive the business forward but it’s still the founder who gets called in to tell the kitchen table story.
Yet, that is not what buyers want to see. They need to see a business that is not dependent on its owner; after all, they’re leaving. Moving the management team to the front of business communications should happen at least 12-18 months before negotiations begin. These leading figures should be at the forefront of presentations, PR and working events to represent the agency to all stakeholders.
Delegating the public face of the business is hard for most owners, it’s their baby after all and so rather than replicating the owner’s past, align the new management team with the future story to build ownership and confidence in the business after sale.
Exit Strategy and Advisory Team
Selling a business usually requires a team. Financial experts such as management accountants to help value the business and create strong financial presentations. There’s the specific M&A advisors and lawyers to act as your representatives, build the Memorandum to highlight your best assets.
However, very few exit advisory teams include communications experts, but having an experienced communications advisor on the team will enable you to understand the wider contextual impact of the deal, help you to take the most salient elements of your Memorandum out to your audiences, discuss how you message and mitigate any perceived risks and generally speaking, build an environment for you to attract strategic buyers for your business and not just financial ones. In this way, a good comms advisor will generate maximum value for your conversations with interested parties.
Strong PR is the magic ingredient in a successful exit and starting the process at least 12-18 months before you go to market means that you integrate an effective comms strategy fully within your preparations for sale.
Over time, a good PR resource will secure consistent presence in marketing and advertising trade and even top tier news media, engage marketing groups, influencers and key opinion leaders and drive content across earned channels that supports the sale messaging, and puts the succeeding management team at the forefront of the business.
This in turn will increase brand visibility and credibility, enhance your reputation at a time when interested parties will be Googling or GPTing the business and its management team. Having positive press, authoritative content and clear messaging across all channels, owned and earned makes you all the more attractive.
One final, often forgotten point, is leverage. Most marketers and advertising agencies know all about the importance of negotiation leverage. If a business is seen as being “in demand”, it creates competitive tension and drives more impetus to get the deal, improving the opportunity for the seller to realise all of that value they have vested in the business over the years.
Contributed by Rebecca Oatley, Founder Cherish PR and Co-CEO, The Wilful Group
