Publicis' acquisition of Kekst and Co. took the PR industry by surprise, if I'm to extrapolate the recent conversations I've had with senior PR leaders. It shouldn't have.
That is not to say that anyone should have known that Kekst was up for sale, though there is always speculation when an eponymous firm's founder approaches his or her fourth decade of running the agency. But the reasoning behind the acquisition both crystallizes a movement underway in the PR industry and sets the stage for more acquisitions and expansions.
In PRWeek's story about the acquisition, both Publicis CEO Maurice Levy and Kekst senior partner Jeffrey Taufield evoked the word "global" in describing their respective impetuses for the partnership. Kekst gives Publicis a standalone financial communications agency in the US, something it would not have been able to establish quickly on its own. Publicis gives Kekst the opportunity to contemplate the global expansion of its client list which, while including a number of foreign companies focusing on US concerns, tends to feature more American clients like Anheuser-Busch, Coke, and KKR.
As InBev's protracted, hostile bid for Anheuser-Busch proves, currency-devalued American corporations are an attractive target for foreign companies. The next acquisition involving a US company seems more likely to include a foreign buyer than a US one.
Technology, diplomacy, and increasingly sophisticated (and lucrative) emerging financial markets are creating a wide-open global marketplace, one rife with different mores, customs, and ways of doing business. This year alone, PRWeek has run features on Pfizer (May 26), CA (June 2), and GE (June 30) and their respective reassessment of how the best strengthen the global structure of their communications teams. Finally, Fleishman-Hillard CEO David Senay highlighted the firm's global commitment by "moving" himself and agency's headquarters to Asia for 30 days.
True, the world's largest companies have long sold their wares in multiple markets, but we are at an unprecedented time where so many populous markets (BRIC and others) are increasing their standards of living and buying power, while the US has been in an economic swoon.
Publicis and Kekst - and Cohn & Wolfe and GCI (last week's other big M&A) - realized this when they decided to join together to strengthen their global brands.
There will, of course, always be room for local agencies and niche firms. But the onus is on midsize and large firms to consider how truly "global" their offerings are. Smaller US-focused agencies without the acquisition interest from holding companies or the opportunity to establish a wholly owned network of offices are wise to become active and significant members of international consortiums or partnerships. Clients and prospectives might seem more concerned with digital, CSR, or green today, but the days when every client puts a global footprint at the top of its wish list are coming. Everyone needs to be prepared.