the showcase 2023
Why 2023 Was A Real Vote Of Confidence In MSQ
From a new equity partner to continued growth at home and abroad, once again MSQ proved itself greater than the sum of its parts
2023 was a landmark year for MSQ, both underlining its maturity and also setting the business on course for a fresh growth spurt.
Fundamental to MSQ's success this year was securing a new investment partner in the form of One Equity Partners, but beyond that big picture the group also continued its market-busting growth through the success of its individual agency brands, not just in London but around the world.
To get the view from the top we asked chief executive Peter Reid for his take on the year.
Peter Reid, CEO, On MSQ's 2023
What three words would you use to describe 2023?
Gunning for Growth
Talk us through some of your company’s highlights this year?
I think 2023 has underlined the strength in the MSQ model – whether that’s from clients, investors or those working in the industry.
Investors certainly see value – in an incredibly tough market we were one of the few major (positive!) M&A stories in our industry this year. It not only allowed our shareholders – of which there’s around 120 in the group alone – to realise a level of value, but, more importantly, it also sets us up to achieve even bigger ambitions going forward.
We’ve invested this year in what we believe in. We proudly achieved B Corp status across our global network, following a rigorous review process that took 18 months and saw us score highly across the certification’s five key impact areas. We also launched our Covent Carbon Capture project, with a renewed focus on carbon removals, rather than simply carbon offsetting.
And we’ve invested in our Joined-Up model – we’ve brought Elmwood into our London hub so that all agencies are once again based under one roof in each location, whilst we’ve upskilled in key cross-group areas such as Commerce, Data and Production.
Our agencies go from strength-to-strength – Walk-In Media and The Gate won agency-defining new business this year in the form of Burger King and The Very Group respectively, while Smarts and Stein IAS were both named Agency of the Year by the leading award shows in their sectors. Brave Spark has almost doubled in size in the past 12 months and is winning clients like Which? and Virgin Experience Days from more traditional creative agencies, while Elmwood has significantly enhanced its global leadership team and is expanding its work on global portfolios such as Mars and Danone as a result.
Finally, what really pleases me is how we’re not just talking the talk but walking the walk from a joined-up perspective. We’re playing a prominent part in creating and furthering major brand platforms, such as the ‘It’s OK, I’m with the AA’ work for The AA, and ‘Less Malarkey, More Smarty’ work for SMARTY, and our clients are in agreement with our highest ever TRR scores across the board – they’re more than 5% higher than the industry average and I think goes to show that you can provide clients with efficiencies without compromising on quality.
What one thing are you proudest of this year?
Our acquisition by One Equity Partners was the culmination of a decade of hard work building a model we can be truly proud of. And, particularly in the past four years, we’d created a business that produced brilliant and valuable work for clients, was attractive to investors and full of people excited and ambitious for further growth. The fact our employees and our initial investor, LDC, reinvested as minority partners alongside OEP was really pleasing, and I think a true reflection of everyone’s belief in the model.
And what’s been your biggest challenge?
Not compromising when hiring talent in what remains a very tough market for the best talent. Whenever we make an acquisition or hire someone, we need to make sure they bring not only the highest level of relevant capability, but are also naturally collaborative, buy into the MSQ model, and are ready to roll up their sleeves and get stuck in too. Naturally, when you grow as fast as we have, you seem to be on a recruitment treadmill – but you can’t waver from what makes you successful. We’ve hired some brilliant senior leaders this year and I’m proud that everyone’s commitment to Joined-up Thinking is more overt than ever.
What are you most looking forward to in 2024?
We stated publicly when the OEP acquisition was announced that the deal will help us accelerate our international expansion and I see that being a big and exciting part of 2024. Particularly in the US and mainland Europe we’ve got massive opportunity to scale and further build out our collaborative model (we’ll be opening a new and improved hub in New York next year).
We truly believe that we can be seen around the world as a genuine alternative to the big holding companies – a leading end-to-end international creative, media and technology group that services the largest clients in the world – and our moves next year are going to be important in achieving that.
What one change would you most like to see in our industry next year?
That agencies start to reap at least part of the potential dividend from AI, rather than seeing it all passed on to clients in lower fees.
AI is coming, and it offers a wealth of opportunities across all aspects of business – from our point of view alone it’s affecting our tech development work, our creative development, media planning and targeting, and our production capabilities just to name a few.
When done well – and when it’s combined with the best-in-class conceptual creative and strategic human thinking we have at our disposal, it can help us work faster and to a more effective standard.
But there will ultimately then be pressure from clients for agencies to pass on this benefit. And whilst there may be efficiencies that can be shared, agencies must stand their ground in ensuring it’s done equitably and that they’re being recognised for the increased value they’re delivering. We all know that’s not necessarily been the approach taken in the past!
Creative Salon on MSQ's 2023
There's no doubt that the sale to One Equity Partners dominated MSQ's year, but this was a fantastic deal for the business - for its staff and for its previous equity partner LDC, which actually re-invested in the company and now has a 15 per cent stake while OEP has around 65 per cent and the management around 20 per cent.
About 120 MSQ-ers are all shareholders in the group and across the shareholder base everyone realised a level of value through this new deal, but they have reinvested at least half of their proceeds back into the group, which reflects their on-going commitment.
And for good reason: MSQ’s track record over the last 4 years has been extraordinary – revenue is +250 per cent, profit is +350 per cent, headcount +225 per cent.
And the net result of the equity changes is a real vote of confidence not just in MSQ but in the whole marketing services sector. The unassuming but energetic and super-smart leadership team of CEO Reid, executive director Kate Howe and chairman Charles Courtier can look back on 2023 with huge satisfaction.
New UK growth came this year in many forms across the group. At MSQ's creative production studio Brave Spark wins included the brand refresh brief from Which?, and the global account for Argentinian wine brand Trivento. The wins helped propel Brave Spark's first foray into the US. Brave Spark New York will be based in MSQ’s Manhattan headquarters on Fifth Avenue and led by executive producer Harry Smith.
Meanwhile, digital agency Twentysix landed Mitchells & Butler's media planning and buying across the Harvester, All Bar One, Toby Carvery and Browns brands. And over at creative agency The Gate, new business included The Very Group, with a brief to create a new brand platform as well as advertising, and Gigaclear, which delivers fibre broadband to rural communities.
On the expansion front, as well as furthering its global footprint, MSQ also launched a production arm MSQ Source and hired Darren Khan, founder of Travllr and former Bauer commercial director, as managing director. He will report directly to Morgan Cox, head of MSQ Global Studios.
To support all this growth, other hires followed. Walk-In Media poached Charlotte Mullan from EssenceMediacom to be its managing director, a new role at the agency. Reporting to CEO Simon Davis, Mullan will help shape day-to-day operations and develop the media agency's capabilities and culture.
MSQ hired Anna-Lee Bridgstock, Ladbible's former group director of data, intelligence and planning, as partner of analytics and insight. And Brave Spark, promoted Rebecca Vickery to managing director and hired Juliet McLaren as executive creative director, while strategy agency Freemavens appointed VMLY&R's consulting lead Eleanor Lloyd Malcolm as managing director.
Creative Salon Says: MSQ's leadership trio of CEO Peter Reid, executive director Kate Howe and chairman Charles Courtier can look back on this year with enormous pride. Swapping equity partners was a massive transition but seems to have been achieved without disrupting business as usual - which true to recent form has comprised impressive growth and international expansion. And the business has nicely balanced the emergence of MSQ as more of a market-facing force with investment in its individual agency brands.
As the marketing services sector increasingly polarises between big and boutique, MSQ is perfectly placed to offer the integrated heft of bigger rivals with the service levels of a smaller business, all whilst offering its people a rich mix of culture and incentives in which they can really play a part. With the equity deal now done, it's now full throttle for 2024.