THE recent purchase by John Singleton’s STW Communications of 49 per cent of The Brand Agency has revived multi-national investor interest in WA’s advertising industry.
Management at The Brand Agency’s largest WA competitor, Marketforce, bought out its major shareholder George Patterson Bates earlier this year, a move that ended multi-national advertising industry investment in WA.
ASX-listed STW Communications is a 67 per cent shareholder of one of Australia’s largest advertising agencies, Singleton Ogilvy & Mather.
Its acquisition of 49 per cent of The Brand Agency reflects the dominance of the Perth-based agency and the markets it operates in, according to The Brand Agency chairman Ken James.
“The big are getting stronger and more successful, while the small and mid-sized agencies are struggling for direction, stability, the best people, best clients and long term success,” Mr James said.
“The advantage of size has contributed to our success in WA, nationally, and internationally and we can now further leverage this strength through our association with the STW Group.”
He said the deal, which was announced earlier this week, would boost the agency’s operations in Melbourne and Auckland.
“It opens up the eastern States a bit more and gives us someone who can help grow our business there,” Mr James said.
“It says something about them that they can invest in a WA agency and they see the potential.
“It also says something about us and the way we run our business. Every multi-national has pulled out of WA over the years and this is the biggest deal ever to happen in WA.”
Mr James would not disclose the purchase price but said “it is a very good deal”.
The Brand Agency has annual turnover of $17 million, which Mr James said made it the largest agency in Perth.
“The funds that we gain will help our long-term stability and the growth of the agency.”
He said The Brand Agency would continue to operate as usual, with the added weight of a major communications player.
“This deal was made because I felt the fit was right and I was happy with it, nothing changes. I remain the chairman, the board remains but we get to grow the business on a national and international level,” Mr James said.
The Brand Agency’s seven existing board members will be joined by two representatives of STW Communications.
The Brand Agency has operated in Melbourne for 10 years and launched in New Zealand last year.
The agency recently won two Advertising Federation of Australia effectiveness awards for campaign work with BankWest and the Water Corporation.
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