China Holding Company BlueFocus Goes West, Buys London’s We Are Social

we-are-social-robin-grantBeijing-based BlueFocus Communications has bought a majority stake in We Are Social, strengthening its Western presence and gaining a global social marketing capability.

Under the deal terms, BlueFocus paid an initial $30 million for an 82.8 percent position in We Are Social, with additional incentive-based compensation doled out over the next three years.

London-based We Are Social employs 400 people in eight offices, including a New York presence that opened two years ago. The firm is focused on social marketing consulting and content development on behalf of clients such as Mondelez and Heinz.

It also has a young paid-media practice, launched in January 2013. Managing Director Robin Grant conceded it’s hard to pry media spend away from dedicated media agencies, which have a lock on many clients’ social ad budgets.

“It’s hard work,” Grant said. “A lot of brands have big global deals with one of the big media agencies, and they’re contractually bound into the deal. For those willing to take the chance, we’re getting great results.”

From a data and tracking standpoint, he said We Are Social is focused on unifying customer and fan communications across platforms, and identifying which individuals are converting and driving advocacy for the brand.

“What we see as strategically interesting to our clients is taking a more traditional CRM approach and really understanding on an ongoing basis your interaction history with each of your fans, ideally across multiple social platforms,” he said.

The deal is noteworthy because typically U.S. and European marketing companies buy their way into Asia, not the other way around. BlueFocus’s new footprint in cities like London, New York, Sao Paolo and Milan may bring it new recognition as a global competitor to holding companies such as Havas and Interpublic Group (IPG).

With a market cap of $3.7 billion on the Shenzen stock exchange, its valuation is already competitive with those firms. (IPG is worth an estimated $6.9 billion; Havas, $2.3 billion.) But all three are runty in comparison to WPP Group (estimated at $17.9 billion) or the soon-to-merge Publicis Groupe ($12.4 billion) and Omnicom Group ($18 billion).

BlueFocus began as a PR firm in the mid-’90s, and has added Bojie (film and TV media agency), Eyes Media (out-of-home), SNK (gaming-focused agency) and Jingo (focused on the real estate vertical). It claims 50% of revenue comes from digital channels and has a stated goal of growing all revenue 10x over the next 10 years.

To pull that off it will need a strong grasp of data and technology, and that’s something Grant said We Are Social can help with. Technology integration, he said, is getting easier.

“The social media technology space has matured over the last few years,” he said. “Social media listening has condensed down, and there are some good choices out there. You can say the same about the social ad platforms.”

While consolidation among social media technology players would seem to favor large companies like, Grant said the pure plays are winning the day – for now.

“Salesforce seems to be struggling to pull off that vision to incubate [listening and media execution] together into one megasuite of social tools,” he said. “The players that stay true to vision of doing one thing well seem to be doing well in terms of functionality and the tools we find effective.”

Enjoying this content?

Sign up to be an AdExchanger Member today and get unlimited access to articles like this, plus proprietary data and research, conference discounts, on-demand access to event content, and more!

Join Today!