News | November 15th 2019

MediaPost | Code and Theory Eyes 2020 M&A, Organic Expansion

Stagwell Group agency Code And Theory which has been helping clients on transformation projects for nearly two decades will do some transforming of its own next year.

For one, New York-based C&T will finally get around to updating its own website. "For the past five years, we have developed maybe 500 websites, but never our own," jokes agency president Michael Treff.

The 500-person agency is also planning significant expansion, including upgrades and additions to its data and analytics units. And the agency intends to scale its Manilla operations, increasing its size by 50% or more next year.

M&A is also on the agenda for next year with plans to acquire several agencies in 2020, all offering services and capabilities to complement and enhance C&T's portfolio. Stagwell has previously said that it will open its pocketbook to fund bolt-on acquisitions for their portfolio companies.

C&T has also refined its leadership team in recent months. In November Ben Berentson was promoted to serve as the agency's first managing director of its New York office, which houses a staff of 250. This frees Treff up to focus on supporting the agency's operations outside of New York, including operations in San Francisco, London and the aforementioned Manila office.

Also promoted was Maud Meister, previously creative strategy director and now group director of brand (a new position) to lead the brand strategy practice, a key area of focus and growth for the agency.

And Paul Simoneschi and Silvan Reinhold were upped to group technical directors to oversee all technical projects out of C&T's New York and San Francisco offices, respectively.

Balancing the right mix of talents is one of C&T's biggest priorities, says co-founder Dan Gardner. "All we are is a collection of people," he says. He adds there really isn't anything proprietary about advertising agencies. This is why diversity of talent is a competitive advantage.

Code and Theory's evolution as an agency has tracked closely with broader industry changes, like increased competition with consultants. Take, for instance, competitive pitch reviews. When the shop first launched in 2001, competitors were digital and marketing agencies, such as Huge and RGA. Now, C&T is as likely to battle Accenture, Boston Consulting Group and Deloitte for wide-ranging transformation bids.

C&T is increasingly viewed as a utility player in Stagwell’s array of specialist shops with different capabilities, which has been facilitated in large part by an infusion of private equity support provided by Stagwell, its executives say.

While C&T leaders view Stagwell agencies as "sisters," Penn's investment and installation as CEO/Chairman of MDC Partners positions MDC shops as more like "cousins," explains Brent Buntin, CMO, C&T.

In October, for instance, MDC’s Doner "organically" requested cousin C&T’s assistance with the agency's pitch to Johnson & Johnson, ultimately helping the shop to scoop up J&J's Tylenol, Listerine, Zyrtec accounts.

That collaboration was not driven by Penn, Gardner and Treff insist. Instead, Doner saw C&T’s capabilities as being complementary to their offering and proposed the two sides collaborate. "We aren't being forced to do anything,” said Gardner. “We assessed the opportunity to see if we could add value," added Treff.

And given the end result, value appears to have been added.

by Larissa Faw, MediaPost