SAN DIEGO: Marketing agency Power Digital has acquired CPG-focused PR shop Covet PR.
The combined agency is set to earn $40 million in revenue this year, said Grayson Lafrenz, founder and CEO of Power Digital.
Covet PR’s revenue grew 25% to $3.8 million last year, according to PRWeek’s Agency Business Report 2020. Lafrenz said the trailing 12-month revenue run rate for Power Digital is $35 million.
Covet is keeping its branding. Covet founder and CEO Sara Brooks is serving as partner and president of Covet, Power Digital’s consumer unit. Financial details of the deal, which closed on July 31, were not disclosed.
“We have two core divisions for clients,” Lafrenz said. “Our consumer team and our B2B team. The consumer business will be called Covet, and we’re working on a rebrand for the B2B business unit.”
The deal will bring Power Digital’s headcount to 170, Lafrenz said. Covet had 31 employees in 2019, according to PRWeek’s Agency Business Report. Power Digital had a 10-person earned media team before the acquisition, but Brooks said there will be no staff reductions as a result of the deal.
“We launched our PR service line in 2017,” said Lafrenz. “Our product will be so much better with the addition of Covet. We have had success integrating PR across the full customer journey. We have had traditional PR people join the team and develop into cross-channel marketers.”
After the lockdown ends, the firm’s combined group of employees will move to one location each in San Diego, New York and Los Angeles, Lafrenz said.
Brooks said she has known Lafrenz for years and the idea for the merger came as she watched the success of digital marketing in general and Power Digital specifically.
“I believe the future of PR is the 360[-degree] approach,” she said. “For agencies, doing PR in a silo is getting more and more difficult. The lines between earned, affiliate and paid are much more blurry. That makes it hard for traditional publicists to do our job and deliver for clients and show true ROI for the PR spend. So this is an obvious choice for us.”
Lafrenz said he is planning to make other acquisitions and if he finds the right fit, he hopes to “get something done in the first half of next year.”
