Advertising leviathan gobbles up smaller rival

Roy Meares

One of New Zealand's largest advertising agencies, Advertising Works Ogilvy, is boosting its creative talent by swallowing smaller firm MTC.

The deal locks MTC directors Roy Meares and Jeremy Taine into a minimum three-year contract with Advertising Works Ogilvy.

It is the second acquisition in 14 months for Advertising Works Ogilvy managing director Greg Partington.

Singleton Ogilvy & Mather merged with Advertising Works last year.

Partington said the latest takeover was to build the company's creative team, a move dictated by its strong line-up of retail clients.

He said the company's retail clients, which include Rebel Sport and Briscoes, were changing the way they advertised and wanted more creativity.

"Our [clients] have learned that there's a really strong correlation between a powerful creative and sales," said Partington.

"We were certain that we had a good competent, creative capability but in order for us to compete, we need to be able to produce great ads and great ads consistently."

Partington would not disclose financial details of the deal but said MTC was independently valued and the company paid accordingly.

He said there were no client clashes between the two companies and no redundancies were expected.

Advertising Works Ogilvy is a major New Zealand advertising agency, thought to be fourth largest by annual billings, which employed about 130 people.

MTC is significantly smaller, with annual billings under $25 million.

MTC was well-known for its work with Lion Red but lost the contract last year.

"The reality is with any agency on the planet is they win and they lose business and that's fine," said MTC director Roy Meares.

"If you've got a critical mass, if you've got a lot of billings, you can absorb that.

"When you're a small agency you feel it more."

MTC's 22 employees would move to its new owner's Stanley St, Auckland, headquarters.

Meares said the deal offered his team more stability in the volatile advertising market.


THE PLAYERS

* Advertising Works Ogilvy is one of New Zealand's biggest advertising agencies. It employs about 130 people and lists big-name clients like American Express, Briscoes and Rebel Sport.

* MTC is a small agency, employing just 22 staff, but its directors Roy Meares and Jeremy Taine are well-known for creative campaigns including Lion Red's "red blooded" series and Cuisine magazine's billboards.

* Advertising Works Ogilvy acquired MTC to boost its creative team in a deal that locks Meares and Taine into a three-year contract.