By Antoinette Siu • July 18, 2024 •
Ivy Liu
Independent digital agency Mod Op this week made its largest acquisition to date, combining with Canadian creative digital agency Evans Hunt as it grows its artificial intelligence and creative offerings.
Adding Evans Hunt’s more than 100 staff brings Mod Op’s total global headcount to 425, according to the company. Founded in 2008, Evans Hunt brings its specialities in web development, particularly in user interface and design in the travel, energy and telecom sectors, to the Mod Op network as the agency expands in North America. Miami-based Mod Op acquired another Toronto marketing agency, Context Creative, about two years ago.
Through the deal, Mod Op hopes to boost its creative digital experience and regional reach. It’s all part of a plan to acquire companies at about one per quarter, most recently purchasing New York-based brand strategy and integrated marketing agency LAM Design in May. More acquisitions are in the works, though likely with smaller targets as Mod Op builds out an integrated agency model in the mid-market space, said the company’s CEO, Eric J. Bertrand.
“We are looking at continuing that pace,” Bertrand told Digiday, who also pointed out that the agency does not aim to become a holding company. “We have a lot of opportunities that are out there.”
In the past 12 months, Mod Op has completed five other acquisitions, including Philadelphia-based agency Red Tettemer O’Connell + Partners (it did not share terms of any of its deals or their budgets). The acquired companies keep their names and become a part of Mod Op’s global agency network. In 2022, Mod Op received investments from South Florida private equity firm Alterna Equity Partners to support its growth. As Mod Op continues combining more AI and media capabilities, Bertrand believes these expansions help it integrate the tech and creative strategies and gives the agency more access to clients in these growing services.
“[The acquisitions] are all basically adding some level of expertise to our platform and trying to drive deeper knowledge, deeper expertise – often in a vertical or in a service offering,” Bertrand added.
One of those developments includes applying AI more intensively on creative demands and data expertise, he explained. In April, the agency established the AI Council, an internal practice group with committees aimed at developing AI and machine learning across its various strategic business units. Mod Op is now testing various internal and client-facing AI projects. Some of Mod Op’s large clients include Nike, Paramount and Nvidia.
It’s one of the reasons Evans Hunt’s expertise in digital strategy, user research and campaigns made a good fit for Mod Op, particularly in providing an in-house research team and working with existing clients like Glassdoor and Travel Alberta. Becoming more full-service oriented, the agency network gets a “combination of creativity and technology [that] is the one-two punch that gives our clients something few others can give them,” added Dan Evans, managing partner at Evans Hunt, in a statement.
For its part, Mod Op pointed to two factors driving its acquisition strategy, Bertrand explained. The first is to develop tech expertise and consolidation within agencies and client relationships. Smaller agencies that may not have the ability to invest in tech or form practice groups have to find larger partners in order to compete. Secondly, Bertrand said clients want to consolidate and simplify their agency partnerships as they look for more full-service shops.
“I do think there is pressure on smaller agencies to find either a larger partner or to be able to invest in order to compete with folks that do have some of this expertise and technology,” Bertrand said.
Parks Blackwell, head of client development at another growing independent agency, PMG, acknowledged a similar pattern in clients “increasingly seeking nimbleness, flexibility and simplification in their partners.” He gave examples of media and creative getting more integrated so that a single agency partner for cllients can help make their day-to-day business simpler.
“Moving budgets across channels and programs, understanding audiences and how to best engage them – that’s all getting more complicated,” Blackwell said. “Brands need a partner to help them navigate, and many are seeking a single source to help create more effective programs.”
https://digiday.com/?p=550285
