For no obvious reason Britain’s recessions come in roughly 10 year cycles at the start of each decade. And the latest was no exception. So what is it that has prompted companies like Dentsu, WPP and Publicis to go an acquisition spree when business is at its most depressed?
Why should Dentsu dip into its coffers and splash out £3.2 billion on Aegis Group at such a time? Why did WPP choose last month to snatch up AKQA for £343 million? And why would Publicis choose this moment to buy out the remaining employee shareholders at BBH?
The most rational explanation would be that all three buyers thought the prices were quite attractive at the moment, dampened perhaps by the sluggish market conditions. But that alone might not be enough. What if the sluggishness continues for a few years more?
The most favourable interpretation would be that the likes of WPP, Dentsu and Publicis reckon that market conditions are on the verge of a revival. If so they will be able to boast that they bought near the bottom end of the market and will reap the benefits of the upturn.
We should all hope that this proves to be a sound explanation, otherwise there will be some very red faces around several board room tables. Meanwhile, as we all catch Olympic fever and throw caution to the wind, let’s hope the latest marketing depression is coming to an end.
Bob Willott is editor of “Marketing Services Financial Intelligence”
