Dax Cornelius, US CEO of Bastion Collective

Bastion Collective is buying regional agencies around the US to form an alternative to the holding company model.
It’s bought three Southern California agencies and plans to acquire more at a rate of three per year.
The company sees an opportunity to serve marketers better than holding companies, arguing they have failed to adapt to changing consumer habits.

The latest salvo against the US ad agency holding company model is being fired from Down Under.

Bastion Collective, a private marketing and communications company in Australia, is buying regional agencies around the US to form an alternative to the holding company model.

Bastion’s pitch goes like this: It’s not a holding company, but rather a collective of regional agencies specializing in engagement and experiential work. Being small, each agency will be able to give clients personalized service, but be able to tap into other agencies in the collective that offer different services.

Read more: Huge consulting firms are coming after the ad agency business — here’s how agencies are fighting back

The other difference with holding companies is that the agencies in the collective retain at least 20% ownership and run their businesses independently, so there’s not massive turnover. At the same time, they’ll gain efficiencies by sharing back-office functions like HR and finance across the collective.

This charge is being led by Dax Cornelius, who is CEO of Bastion Collective’s US arm. He said the company built this model in Australia 10 years ago and that it’s helped make the company a leading private marketing company. He said the holding companies haven’t kept up with consumers’ increasing intolerance for ads and clients’ demand for lower marketing costs.

Bastion is focusing on engagement and experiential work

“We built this model because the conglomerates have become too unwieldy, and they’ve become sitting ducks for nimble competitors like us,” he said. “The conglomerates target [consumers] with constant disruption. Our approach is, it needs to be not reach but engagement, experiential.”

To accomplish this, Bastion is buying regional agencies — since setting up shop in Irvine, California, in October 2017, it’s already bought three in Southern California, called Rare Branding, Digital Brand Group (combining and rebranding them as Bastion Rare), and LFPR (rebranded Bastion Elevate). It’s looking to acquire research, content, and experiential agencies next, spending 20% of its $55 million in annual revenue on the first six acquisitions. Going forward, the plan is to do three acquisitions per year.

Among its clients in Australia and Asia are Nissan, Jeep, Target, Costco, and McDonald’s, according to Cornelius. Bastion’s US clients are smaller-scale, but it has no doubt that over time, it will have the same kind of big names on its roster in the US.

“What we’ve done in Australia in 10 years, we’ll do in the US in four to five years,” Cornelius said. “We’re already working for those brands overseas, and with the cross-pollination of our agencies, I expect we’ll be handling those clients in the US.”

The moves come as US marketers are looking for alternatives to big agencies, holding companies are consolidating their …read more

Source:: Business Insider

      

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An Australian group is snapping up US agencies to try and take on holding companies

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