Two agencies in the Washington, D.C., area – CHIEF and WHITE64 – have been acquired, not by competitors, but by non-traditional buyers – in one case by a credit union.
Enlightenment Capital, an Aerospace, Defense & Government (ADG) focused investment firm based in Chevy Chase, Md, announced its portfolio company ByteCubed acquired CHIEF, a full-service creative agency in D.C. that specializes in marketing, branding, creative design, media, technology, and online user experience. According to a release, “the acquisition provides ByteCubed with complementary design and technology solutions that, when with ByteCubed’s existing IT transformation capabilities, will deliver immediate benefits to ByteCubed’s customers. More here.
In addition, PenFed Credit Union acquired marketing services agency WHITE64, which has served as PenFed’s marketing agency since 2014. According to a release, under the terms of the agreement, WHITE64 will retain its name and operate as a virtually autonomous unit, rather than an in-house agency. Matt White will continue serving as president of the agency, which is based in Tysons, Va, and White64 will continue serving existing clients while also seeking new business. More here.
(And, last month, BCW (Burson Cohn & Wolfe), a global communications agency and a WPP company, acquired HZ, headquartered in Rockville, Md, with offices in Baltimore, Los Angeles, New York and Washington, D.C.. More here.)
Capitol Communicator asked Cary Hatch, CEO of D.C.-based MDB Communications, about the spike in agency acquisitions and she told us that it’s “not surprising that in the race to secure talent, increase share of market and make an investment in the tools needed in coming years, that suitors have evolved to acquire advertising and marketing agencies. What is surprising is the velocity of the deals – and new players entering the field. Once the domain of holding companies and other large independent agencies, new business models and investors, as we are seeing, are now on deck.
“Earlier this year, Ken Auletta (author of Frenemies) examined the race for “scale” by not only holding companies, but investment firms, management consultancies and technology firms with data analytics at their core. The largest “agencies” of late are familiar names like IBM, Accenture and Deloitte; albeit it not necessarily known for their advertising prowess.
“Why the change and why now? It’s been an increasing complicated decade-long path for advertising agencies to remain relevant and viable; and with the need to invest significant resources in the future, the time is right. So the recent flurry of acquisitions and the new ownership models that are evolving are further affirmation of an increasing velocity and an expensive race to remain relevant in an era of constantly changing demands.”