OPINION: The Big Question - Can a holding company made up of separate agencies work? Former Ludgate Communications founder Tim Trotter is planning to pull together a collection of specialist agencies within a single holding company with the intention of f



’There are three key issues here. First, will there be any shared

culture between the companies involved? The answer is almost certainly

not. One-stop shops might claim some kind of unity of purpose but if the

only logic is money it lacks something. The second problem is egos -

people who have built companies that are large enough to be worthy of

involvement will have substantial egos and need either a substantial

pay-off or will want to be top. Third, there is a danger that the whole

will actually be less than the sum of its parts. It always seems like a

good idea but if it is, why has it not yet happened? It looks logical

but it does not cater for the emotional aspect of running a


ALEX SANDBERG - College Hill

’This idea is not exactly new and it has had mixed results. It did not

work for City and Commercial but it is working for Citigate and I expect

it will work for Lighthouse which bought Financial Dynamics among other

things. The key is management of the different parts -will they work

together over a period of time? The last time I looked, the Stock

Exchange was only interested in companies where the management has

worked together for some time. There are cost savings and there is the

opportunity of cross-selling, but wouldn’t like-minded souls prefer to

do it for themselves?’


’It could be a good idea for the top independent agencies across Europe

as a lot of clients are looking for the best of breed in each


I can also see the value of doing it with other marketing service

agencies that are focused on the internet. Because of the value of those

companies in the digital economy, the value would be greater than the

sum of its parts. I cannot really see the value of it for companies that

are competing.

We have clients now from companies in the financial service and retail

sectors so we would be in competition with other agencies in those


Technology is taking over businesses, so although we are not competing

head on we are still talking to clients in the same sector, for example

if Tesco want to know how to promote on-line shopping.’


’It is impossible to put together a highly individual group of

entrepreneurs unless they are prepared to accept the leadership of an

individual - and who will that be: Tim Trotter? If you want to float an

agency you need to be making at least pounds 5 million revenue or the

costs involved do not make it worthwhile. So you would need a group of

agencies making pounds 1 million a year and those companies are making a

nice little turn and are unlikely to want to surrender their freedom.

For it to work you need bigger companies with turnovers of pounds

5-pounds 6 million, then you might find it possible. If you could do it,

I do think it would be worth more than the sum of its parts because you

would be able to present the City with a real profit stream.’

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