Hot on the heels of absorbing two US agencies, S4 Capital is bringing Tomorrow, a 50-person Shanghai-based creative agency, into its MediaMonks content practice.
The absorption of the agency roughly doubles the MediaMonks headcount in China, and Tomorrow boasts Burberry, Budweiser, Beyond Meat, Coca Cola, Starbucks, Crocs and Red Bull as clients. The agency, founded in 2015 by Rogier Bikker, won the gold award for Greater China Independent Agency of the Year in Campaign Asia-Pacific's Agency of the Year Awards in both 2020 and 2019. Bikker will be MD of the combined operation in China, which will operate under the MediaMonks moniker until a move to a unified brand that Sir Martin Sorrell, executive chairman of S4 Capital, has said is in the offing.
Victor Knaap, CEO of MediaMonks and S4 Capital executive director, said the deal is about bringing together culturally relevant creativity with execution power, and about building scale. "And by no means is this going to be the last deal," he told Campaign Asia-Pacific. "We're definitely looking, especially with Rogier onboard, for more mergers to come in China. Sir Martin has said that we need to do 40% of our business out of Asia, but we're at 12%. And other parts of the business are growing really fast, so we need to double the growth in order to increase that value."
Knaap added that MediaMonks' China business grew 45% last year, and Tomorrow grew by double digits as well. "By bringing it together you get a certain scale that allows you to to move faster," Knaap said. "So we can handle bigger clients, and we can hire more specific talent."
While MediaMonks staffers in other markets already execute work for the China market, and vice versa, Knaap said, it's important to make sure the company has a local, creative focus. MediaMonks will also be looking to "double down" on social and content production, he added. "So we probably are going to look for a studio, because if you come up with ideas, especially in a really fast-moving world, you need to produce in a very fast way as well. It means owning your own studio space, owning your own material, having influencers walking around there, and creatives creating ads on the spot."
Bikker, who has been running agencies in Shanghai for 11 years (he co-founded Energize prior to Tomorrow) the merger was the right move for Tomorrow because it combines strategic and creative thinking with execution and production capabilities. "What we see happening is that big brand campaigns are converging with social campaigns," he told Campaign. "Being able to deliver content at scale is no longer doing a campaign every three months, but doing a campaign every three days. That requires a completely different setup, which, if I would have gone at it alone, would have taken me another 11 years."
Knaap asserted that up-and-coming Chinese brands, especially tech brands, just don't mesh well with traditional agencies, whereas MediaMonks' legacy with tech companies—and its insistence that it's not an agency—set it up well to capitalise.
While sometimes a brand will go to a traditional creative agency for a big-idea platform, what they're demanding most is speed of delivery. "What we're trying to provide is the speed of the consumer, connected to the speed the brand needs [to deliver] to play a part in that consumers life," Knaap said. "You need to create a beating heart of content production, and come up with rapid ideas continuously which talk to that big-idea platform."
Like all S4 mergers the deal pays Tomorrow 50% of its value in cash and 50% in S4 ownership. "We want Rogier to be on board to be the driving factor," Knaap said. "I want an entrepreneurial person running our Chinese offering. And I think that structure is a big part of our success."
In a release, Sorrell said, “I’ve always been a raging bull on China’s economy, its consumers and its brands. I’m delighted to welcome Rogier and his colleagues at Tomorrow to the S4 Capital family, in what is a priority market for us and one of several more moves in what will become the largest economy in the world.”
“Tomorrow has quickly established itself as a creative leader specialised in representing global brands to the Chinese youth in a challenging market like China," added Michel De Rijk, S4's Asia Pacific CEO.