Publicis Groupe has bought Octopus Group, an integrated B2B marketing agency in London, as it sees business-to-business marketing as “a big growth area” for both B2B and business-to-consumer clients.
Octopus Group, which was founded in 2001 and employs about 60 people at its office in Farringdon, will become part of Publicis Groupe’s UK creative practice and move to the nearby Chancery Lane office, where Saatchi & Saatchi and Leo Burnett are based in London.
It is Publicis Groupe’s most significant UK-specific M&A activity in the creative space since 2014 and signals that some of the big agency groups could be ready to go on the acquisition trail again as the economy rebounds from the coronavirus pandemic.
Annette King, chief executive of Publicis Groupe UK, said she has been looking to “enhance” its B2B capabilities since she joined in 2018.
“B2B is such a big growth area in the industry in general,” she said. “A lot of clients are B2B clients but some clients are [both] B2C and B2B clients, in various different ways, so to be able to really service all of our clients, B2B is a key set of capabilities and expertise that we need.”
Octopus Group’s clients span technology, financial and professional services brands, such as Siemens, Adobe, Logitech, Smartsheet, Cognizant and ACI Worldwide, and it has a range of “tech-first” capabilities, including creative, content, digital experience and public relations.
Octopus Group topped PR Week’s rankings of the biggest agencies by B2B revenue in the UK last year, with estimated revenues of £6.2m.
Jon Lonsdale, chief executive and co-founder of Octopus Group, said it has expanded from PR and comms and adopted a “more integrated agency model for B2B” in recent years.
'It’s a pivotal time for B2B right now'
Octopus Group has continued to grow, despite the Covid-19 pandemic, and has recorded a 30% increase in average project size, according to Lonsdale.
“It’s a pivotal time for B2B right now,” he said. “It has always been the bridesmaid, rather than the bride, but actually a lot of the big shifts that are going on in the economy, not just in the UK but globally, but are very much B2B shifts.”
Octopus Group does not have shared clients with Publicis Groupe at present but Magnus Djaba, chief executive of the creative practice of Publicis Groupe UK, who will oversee the acquired agency, said they have “shared belief and shared ambition”.
Lonsdale said joining a bigger group was an opportunity to “scale” the business and “get access” to Publicis Groupe’s data, tech and creative capabilities.
“We have always banged the drum that just because it’s B2B, it doesn’t have to be boring and dull,” he said.
Djaba said Octopus Group has a “forward-facing point of view about B2B, rather than looking back at how people might have delivered communications” in the past.
“The disruption caused by the pandemic means some B2C brands are increasingly adopting a B2B2C approach,” he said.
“Brands are also facing a time of huge technological transformation and disruption, and one of the things that attracted us to Octopus Group, is their technology background.
“We need to understand all the challenges our clients face, from marketing to distribution to commerce to product innovation, to deliver the right creativity at every point in their sales funnel.”
King said: “We’ve been looking to acquire the right B2B partner to supercharge our skill set in this area for some time. Octopus has a proven track record of solving client challenges in ways that transform categories.
“Bringing them in to Publicis Groupe UK as part of our Power of One model, presents a great opportunity for client and agency growth.”
Publicis Groupe’s UK revenues fell 12.4% last year during the pandemic. The French parent company performed better than expected globally, as revenues fell 6.3% and its share price recovered all of its losses by the end of 2020.
The group’s last significant UK creative acquisitions were for Salter Baxter and Turner Duckworth in 2014, although it has done other deals including for production business Translate Plus in 2017 and the completion of the buyout of Blue 449 in 2019.
Octopus Group’s management team are the main shareholders. They include Lonsdale, finance director Ben Holden, board director Nicola Pestell, chief strategy director and co-founder Billy Hamilton-Stent and Pete Hendrick, managing director and co-founder.
Financial terms for the deal were undisclosed.