MSQ: Building back bigger
The global holding company has spent recent months buying agencies to add to its portfolio. We talked to its management team about their growth strategy
14 December 2021
When MSQ Partners unveiled its acquisition of the well-respected design agency Elmwood earlier this month, the news capped an exceptionally energetic period of growth for the group.
The Elmwood deal follows the purchase in October of creative studio Brave Spark and of digital marketing agency MBA back in the Spring. MSQ’s recent financial results for the first half of 2021 revealed a 35 per cent overall revenue growth, and like-for-like revenues rising by 30 per cent, leading to pre-tax earnings of £5.8 million. It’s been quite a year for the group which owns agencies including The Gate, MBAstack, twentysix and Walk-In Media
Hard on the heels of the Elmwood news, Creative Salon caught up with Peter Reid, MSQ’s chief executive, and Kate Howe, executive director, to talk about its joined-up agency model and some of the creative ideas that have contributed to the recent growth story.
Simplicity for clients
So how does Peter explain MSQ’s recent strong performance? After all, much of it is due to organic growth as opposed to the impact of the recent acquisitions. “The core of the model is that it’s not a ‘one-stop shop’, getting all the agencies working together, but absolutely about making things easier for clients,” he says.
Kate argues that this approach has become vital at a time when marketers and technology leaders at brands are under so much time pressure: “The way that we encourage the preservation of the cultures within the agencies is key to why they are so successful in their own right, and I believe that our model works because they’re so strong individually and then collectively we’re bringing together a room full of equals, which is critical.”
She also believes that the ownership model, which sees many of the individual agency leaders at MSQ have a stake in the company alongside the private equity investment, creates a strong culture of success.
MSQ owns and operates ten specialist agencies employing 1,000 people across 13 offices in the UK, Asia, and North America (including its London base on Covent Garden’s Bow Street complete with excellent views of the Royal Opera house).
Peter, a consultant by background, has turbo-charged MSQ’s growth on the back of 2019’s investment from private equity firm LDC and a subsequent move in 2020 that saw MSQ acquire Be Heard Partnership in a deal that brought Be Heard’s MMT Digital (tech and digital transformation), Freemavens (data analytics/insight) and Agenda21 (digital media) into the MSQ family. Kate joined MSQ in late 2019 from Dentsu Aegis Network, where she led its creative, customer experience and commerce agencies. The rest of the group’s management line-up management line-up also features executive directors Ben Rudman and Bart Michels, who joined from Kantar in October - a sign of MSQ’s ambitions in the research and consulting space - and the chairman Charles Courtier.
Alongside greater investment in sustainability initiatives (MSQ is going through the process of applying for B Corp Status) and diversity and talent programmes, Peter is also proud of Walk-In Media’s global programmatic trading capability and Brave Spark’s content platform, which he says means that MSQ has “as interesting and dynamic customised content at scale offer as anyone in the market.” He adds: “I see more clients interested in this but also not getting the experience that they expected.”
Behind the systems and financial figures, however, there’s an undoubtedly impressive human element to the people and agencies that have powered MSQ to new heights. Peter and Kate’s skills, for instance, seem ideally balanced. Peter driving the growth strategy forward while Kate, a tireless networker, remains phenomenally well-connected in the ad and media worlds, understanding the needs of clients and pushing MSQ’s marketing and new-business effort.
Highlights from the individual agencies in the group include The Gate’s ‘Nobody is Normal’ campaign for Childline, which scooped five Cannes Lions in 2021 and a Gold at the recent EPICA awards in Paris, while B2B agency Stein IAS landed Gold in the WARC Awards for Effectiveness for the ‘Safeport’ work for Trelleborg. The group’s MSQ Sustain unit is also advising many of its clients, and had a strong presence at the COP26 summit.
Areas for future growth
In recent months, MSQ has boosted its operations in North America, hiring Deloitte’s Aaron Lang and Justin Cox as president and chief strategy officer, respectively, in the region. But what does Peter see as the next chapter in MSQ’s growth story in the UK? While he doesn’t rule out further acquisitions he says: “We’ve been heavily UK-focused and I think that there will be a bit more balance generally. We’d still love to build a bit of scale in a few areas – particularly boosting the right bits around the world in business insight, data commerce and tech.”
Peter also says that MSQ views e-commerce as a high growth area, “and being able to connect the whole story, from really understanding a strategy and proposition, through performance marketing and tech, is a big opportunity.”
There’s also a job to be done in raising the profile of MSQ. “In the UK generally it will be more about getting out there, getting our name and proposition understood more,” says Peter. “Pushing on new-business and organic growth because we feel that the model is working very well but that we can deliver this for some bigger clients. Then, from a global point of view, building out our capabilities in our key hubs.”
Kate, who will undoubtedly play a central role in this, is convinced that there’s a significant opportunity for MSQ in helping clients to negotiate rapidly-evolving trends in technology: “We’re braced for the impact of NFTs now, we’re having conversations about blockchain. It’s all moving so fast, that you have to continue to acquire talent, whether through traditional M&A or by hiring people in. We will continue to invest in those spaces, because that’s where the growth is and where our clients need us to be.”
MSQ’s impressive focus on its clients, together with the dedication and commitment of its senior people, will be notable assets in this fast-changing landscape, and it’s in an exceptionally strong position to deliver yet more growth in 2022.