The need to break down the barrier between brand marketing and performance marketing has shifted agencies from a traditional creative approach, often complemented by data-driven work, to a greater share of the category's growth. Mekanism is one of the agency's brands whose mission has changed due to growing demand for comprehensive offerings, and aims to combine the "spirit" of boutique marketing with science, as CEO Jason Harris puts it.
Mekanism was acquired by the Plus Company, a new private advertising network that started last year in Canada in San Francisco but now uses an agency with offices in Chicago, New York, Los Angeles and Chicago. his American footprint. In a volatile ad market that has shaken some of the biggest ad groups and cooled mergers and acquisitions, Mechanism has remained active and even expanded overseas. Gaining accounts for 2023 include Harmless Product, Fossil and Wine Group.
Mekanism acquired Madrid-based design studio Zapiens in September, which Harris says wouldn't have been possible without Plus' support. Mechanism also uses a new predictive intelligence solution developed by Plus, which aims to modernize mixed media modeling and measurement. The tool, called Plus AIOS, helped clients reduce costs per conversion by 29% and improve campaign efficiency by 23% in an initial test, optimizing average spend by nearly $2 billion.
Marketing Dive caught up with Harris last week at Advertising Week in New York to talk about his over-a-year deal with Plus Company, what led him to buy Zapiens, and why he's optimistic about 2024.
This interview has been edited for clarity and brevity.
Marketing Interruption: Last time you talked about the Plus acquisition, you said it took 20 years to build the Mechanism, but now that you're pushing for a full deal, you want it to happen in a few years. What progress?
JASON HARRIS : It was really good. We have recently updated our placement. We always talk about spirit and science. Soul is the long-term structure of the brand we're known for, and then we add all these other services to the science side, including personalized marketing, loyalty programs and ongoing digital experiences like CRM. . Our new offering is our modern creative agency that promotes business growth.
Marketing budgets were really being tested. You need to show value for every dollar you spend. We quickly added these services to the bottom of the funnel and found many benefits by offering both. CMOs have a lot to worry about right now. They just want an agency that can do more. They don't want to have 10 partner agencies. Doing business with an agency will be more difficult if you only focus on branding opportunities and don't add these other elements.
MARKETING DISRUPTION: During Ad Week, I often heard that the wall between brand and performance is getting smaller.
HARRIS : I think it definitely is. Because performance agencies are notorious for doing low-level work, I don't know if clients believe they can do brand-building work. As for us, we need to demonstrate to our clients that we can achieve business development even in the short term. It was a big change.
The network [Plus Company] has invested a lot of money in building a measurement platform called Plus AIOS, an All-in-One System. It is a measurement system for planning, optimizing and measuring campaigns built with predictive intelligence. It's about helping CMOs understand the value of the money they're spending and, based on that experience, predict where they can best invest their money and what the outcome will be. Without this acquisition, I think we would be further behind than we should be. Of course we will spend millions and millions of dollars to build this system.
Marketing break: Looks like the Plus deal has gone under the net.
HARRIS : We can't agree now. No one can borrow, it's too expensive. You should know what you are doing when you buy. If you don't focus on growth, things will be more difficult. Because it's never smooth sailing. There are always cultures that meet.
For us, we did it at the right time. Once you could sell it and tell people why you did it, it was great. For our team, it really allows them to continue their abilities. If they are just building a brand and not exploring the bottom of the funnel of digital elements, they will be limited in whether they stay with Mechanism or go elsewhere.
MARKETING DIVE: How did the Zapiens acquisition come about?
HARRIS: We didn't [look for agencies to buy] until we signed the Plus Company deal. And then we look at nearby companies that we think are small and digital savvy. What struck me about Zapiens was their design. They know UI/UX, they're great at digital skills, but it's not at the sacrifice of their design skills. We went there a few times, broke bread with them and said, “Oh, these cultures will integrate well. »
We're new in this industry, so we're trying to figure out relationships: what kind of customers can we get them, how can we grow their business, how can we sell their services.
MARKETING GAME: It is also interesting that they are in Madrid. Is this international footprint new territory?
HARRIS : This is new for us. The United States is expensive, and for one reason. But we were really drawn to its design. European design has a keen eye. New services, practical and high quality products, three wins.
MARKETING GAME: This year has been tough in a macro sense. How did you manage to acquire new businesses?
HARRIS : A trend that I've seen in the fourth quarter and I've talked to a lot of agency CEOs is that there's usually a lot of organic growth and a lot of upside because clients are spending regardless of how much money they're leaving. To him. This year the trend is decreasing. I haven't seen him in maybe ten years.
There are several elements that shine. Our customers stay with us but don't add any extra money. Another trend is that new businesses are crazy. Seats and new customers increased significantly in the fourth quarter, but organic spending declined. In my opinion, this shows that customers are using the fourth quarter to find new resources to get to 2024 with new partners because they are spending less.
I think 2024 will be a great year. I have good hopes. But it was a difficult year. Interest rates are so high, it's really hard to get a loan. Finally, if you can't borrow, it will be harder for you to make mergers and acquisitions, harder for companies to grow, and harder to stimulate the economy. It should come down.
MARKETING DIVE: Let's just say things are getting a little better. What areas would you be interested in investing in or buying next?
HARRIS : Multimedia performances. We have a strong media group, but we need to be sharper and better, especially in media performance. Now that we have digital experience and business results, it's time to increase our media productivity. If we can breathe a little longer, this will be our next target area.
