Consolidating an existing relationship between the two agencies, and furthering what global CEO Guy Hayward jokingly described as a plan for “global domination,” KBS is folding its sister MDC Partners agency Kenna into its Toronto operation.
MDC Partners first acquired a majority stake in Kenna in 2010 and will now assume full ownership.
The Kenna name will be retained, and the CRM agency will maintain its approximately 130-person Mississauga, Ont. office, led by managing director and executive vice-president Jeffrey Bowles. Kenna CEO Glenn Chilton will remain with the company as a senior advisor to KBS Toronto’s leadership team.
Speaking with Marketing from London, Hayward said it was important to retain the Kenna name to signify to current and prospective clients that it would continue to specialize in its core discipline of data analytics and technology.
“I think half of it is ensuring that the people in that role remain specialists,” he said. “One of the things that has happened is that as agencies have had to produce work across more channels, we’ve created integrated agencies. The result of that is that often everyone is a jack-of-all-trades and master of none.”
Hayward said the ultimate goal for KBS is to create a “multi-specialist” global agency defined by core pillars including advertising (represented by the core KBS brand), social media (represented by the Attention brand), media planning and buying (The Media Kitchen), PR (Kwittken) and now CRM (Kenna).
He said KBS’s New York office could ultimately leverage Kenna’s CRM expertise, and ultimately export its capabilities globally. “Are we going to take the Kenna brand global? I don’t know. But can those 150 people in Kenna in Canada really support our New York capabilities? Absolutely.”
Asked to provide a timetable for a future North American rollout of the Kenna brand, Hayward responded: “I think they’ve got to focus on getting it right in Canada, but I would say that by early next year we’re looking at opportunities to bring its capabilities to our U.S. offices.
“Once the dust has settled and everyone has figured out how to work with everyone in Canada, then we will open the corridor down to New York.”
Hayward said CRM has become “critical” for KBS clients such as Vanguard, American Express and BMW, but acknowledged that it “slightly snuck up on us” after traditionally being a somewhat marginalized aspect of the marketing-communications function.
“The ability to manage somebody from first noticing the brand to acquisition has put it right at the heart of the brands’ own business,” said Hayward. “Therefore, some agencies have put it at the heart of their [business].”
While stopping short of saying CRM is at the heart of KBS’s operation, Hayward called it one of the “key organs” of the business.
Kenna plans to move between 30-35 people from its Toronto office (once home to Henderson Bas Kohn, which merged with Kenna in 2012) into the KBS Toronto offices; Chilton said “a handful” of duplicate positions within the company, predominantly back-room functions, would be eliminated as a result of the integration.
KBS Canada CEO Steve McCall said the integration process is “pretty straightforward,” with no client conflicts. Kenna’s client list includes BASF, Dr. Oetker, Rogers, Sonos and Capital One.
McCall said the KBS “stack” model enables the agency to evolve by incorporating best-in-class capabilities into its suite of services. “Most of our clients’ needs come to us for a full-service offering, so we always have to make sure we’re bringing best-in-breed [capabilities] to stay on top of that,” he said.
“That’s where clients get the value on their marketing return, so to be able to add to our existing capabilities and make it an even stronger centre of excellence within the group was a no-brainer for us,” he said.
McCall said discussions about integrating Kenna within KBS began in earnest in the fourth quarter, stemming from what he described as a “scaling up” of the agency both in Canada and North America, combined with a growing need to add Kenna’s data analytics capabilities to its existing client offering.
“We could try and scale this capability up through KBS and have to do the hard work of proving that we do it well, whereas Kenna’s history and the equity in that name makes it a much easier sell,” he said. “When we looked at our 2015 and beyond planning, [the question was] ‘Do we build it ourselves or do we partner with Kenna?’” he said.
Chilton described the merger as a coming together of two “best-in-class operators,” noting that it was the fastest route to providing a “comprehensive solution” for both Kenna’s current and future clients.
“We have built up great capabilities in data and analytics and CRM; increasingly our clients are looking for a single source provider on their general advertising to ensure there’s a similar brand experience from the initial point of contact right through to building loyalty and advocacy through social media.”
Hayward joined KBS as its first global CEO in January after spending the previous four years as global business development director with Havas-owned BETC Worldwide. He is tasked with growing KBS’s global client roster, a role he said is “going well.”
The short-term focus, he said, is on working with existing clients in new offices including the recently launched KBS Albion Group in the U.K. and Europe, and the agency’s new office in Shanghai.
Asked specifically about the network’s Canadian operation, Hayward said it has “responded well” to the unexpected loss of the Target Canada business earlier this year, recently picking up what he characterized as a “nice global assignment.” He did not provide further specifics.
“One of the things we did in January is said ‘Let’s make sure we end this year really strongly,’” he said. “That’s part of the motivation of bringing Kenna into the group. This is really so we can end the year in a totally different place from where we started. This is a big rebound strategy that’s happening.”
