French group builds rival to Sorrell’s S4 with UK deal
Fimalac buys London digital ad company Jellyfish to create ‘new kind of agency’
Fimalac, the holding company owned by French billionaire Marc Ladreit de Lacharrière, has bought a majority stake in digital marketer Jellyfish as it seeks to rival Martin Sorrell’s S4 in a rapidly changing advertising landscape.
The French group will merge its data-driven marketing specialist Tradelab into London-based Jellyfish as part of the deal. Fimalac declined to comment on terms but said the combined entity would have a market capitalisation of roughly £500m.
“We want to create this new kind of agency that Martin Sorrell started,” said Véronique Morali, president of Webedia, Fimalac’s digital media subsidiary. “Now we are in very good shape to be a real competitor.”
Jellyfish, which was founded in 2005, was an early adopter of search engine optimisation techniques and helps brands apply digital analytics to marketing and advertising. It also offers creative campaigns, digital training and consultancy for clients including Uber, eBay, Disney, Spotify, Nestlé, Ford, Aviva and Asos.
The merger between Jellyfish and Tradelab comes as the traditional advertising agency model dominated by the likes of Omnicom, WPP and Publicis is being overturned.
Clients are shifting from traditional media such as television and billboards towards data-driven online advertising, while competitors are emerging from other sectors, including consultants such as Accenture and Deloitte and digital platforms like Facebook.
Digital marketing is advertising’s fastest-growing area. It will attract €330bn in ad spending this year, or about half the global total, according to forecasts by eMarketer.
Sir Martin launched digital-only S4 in May last year, just a month after being forced out of WPP, and the group has since embarked on an acquisition spree.
Rob Pierre, Jellyfish co-founder and chief executive, said he believed the future of advertising was a “data and a digital-first approach” and that this had paved the way for new entrants to the advertising industry.
“In the past, the big agencies and the networks almost had a monopoly . . . If you bought all the television slots, all the billboards, all the advertising space in magazines and papers and radio, you could actually freeze out competitors and the disruptive brands trying to come through.”
Mr Pierre said the rise of digital marketing had opened up the market. “Through data you can now have one-to-one relationships with each one of your customers. You can provide them with personalised marketing, understand what are their behavioural habits and make sure that the technology is in place so that they can own their data.”
Fimalac will own roughly 74 per cent of the combined entity. Jellyfish was advised on the transaction by boutique investment bank GP Bullhound.
Jellyfish last year recorded sales of £53.7m and profits of £8.5m. Mr Pierre said the deal was attractive because it allowed Jellyfish to “further our growth and to accelerate”.
The merger with Tradelab will give it a presence in new markets including France, Germany, Italy and Brazil. It will also increase headcount from 780 people to almost 1,200, with a target of 3,000 within two years.
“We’re taking similarly aggressive ambitions to S4 Capital because we’re right in the same place and we’re looking at the same opportunity,” said Mr Pierre.
Fimalac, formed by Mr Ladreit de Lacharrière in 1991, has interests in sectors from live entertainment and digital media to luxury hotels and real estate. Last year it sold the remainder of its stake in rating agency Fitch to US media group Hearst.