It seems like a long time has passed since the likes of WPP and Omnicom were effectively challenged in the market. Since their inception as holding companies, going far beyond the original intent of their business strategies, they have evolved into stratospheric market movers, and hold plenty of sway in key sectors around the world.
Now there is a new challenger on the block, called Bastion Collective. The Australian-based company is aiming to take on the holding company model by snapping up key U.S. agencies, and says it is better able to meet the needs of today’s marketers compared to these companies which have been going for decades.
Their current push is to keep on acquiring U.S. regional agencies at a rate of at least three a year, having already picked up that amount from Southern California alone in 2018.
Although the company is keeping its base in Australia, they are purporting the key difference to be that this will work more like a network than a holding company that controls everything from a single headquarters. On this basis, their assertion is that going to any of the regional services will see the client be able to access a range of different options, but they are perfectly capable of reaching out to all the other services attached to the network.
This goes against the grain of the centralized structure typically proffered by holding companies, and with the likes of WPP struggling with a series of scandals centered around their former CEO Martin Sorrell, there is scope to believe this is the perfect time to act to take advantage of any market discord.
While there may be some questions concerning how much control these regional agencies will actually have, reports indicate all of them will retain 20% ownership of their business, which gives them enough of a turnover stake to keep their own performances to a high level. One of the ways Bastion intends to make savings across the board is through sharing human resource and finance functions, while embracing newer technologies to help maintain it.
The reason for the seemingly aggressive expansion in the U.S. is down to Dax Cornelius, the head of their U.S. arm. He felt that although the enterprise had found success in Australia thanks to its private marketing initiatives, many clients and businesses were moving away from holding companies because the advertising scene has changed hugely in the last decade or so. He also said people are now aware that they can get a similar return on investment for much lower costs than through traditional marketing methods.
Cornelius told press: ‘we built this model because the conglomerates have become too unwieldy’, suggesting those competitors are now ‘sitting ducks’ to the business model put out by Bastion. He said he felt they had scope to make huge inroads because they were concentrating on ‘engagement, experiential’ work rather than the typical ‘constant disruption’ that holding companies are more used to working with. The general experience market has been gaining traction in all sorts of areas in the last couple of years, from consumer behavior to business-to-business trends.
It already has large names on its client list in Australia, and as it continues to aim to spend 20% of its annual $55 million revenue on acquisitions, it may not be long before they see a similar pedigree in the US.