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From our Depsters February 08, 2019

Attack on advertising market now comes from the digital angle

Dept Skateboard

After attacks from larger consultancy and IT firms, advertising agencies are once again faced with a large-scale invasion. Dept agency, a once small company in the digital sector, now has over 1,000 employees.

This year, part of Dept’s focus is aimed at the United States. The company is already active there on a small scale and wants to take the first major step overseas this year with an acquisition, according to Paul Manuel. Brothers Paul and Bart Manuel founded the agency TamTam twenty years ago and were the instigators of Dept three years ago.

The agency has continuously grown since then – with help from the Waterland investment fund – and has skyrocketed. TamTam and eighteen other agencies merged to form Dept. Additionally, five German agencies have joined the Dept repertoire. From 2016 on, the office grew from 150 to 1100 employees now and generated 125 million euros in net sales this past year.

With the acquisition of the digital agency e3creative, yet another sixty people will join the Dept team, Dept announced Thursday. The agency from Manchester developed a website for Sony Playstation where gamers can buy PlayStation products, as the Japanese prefer that the office does so in many more countries.

New market parties

Dept is not the only party to buy marketing companies. Since most consumers are found on social media and via online shopping advertisers are looking for new ways to reach them. That is why large advertising networks such as Omnicom and WPP are buying up digital marketing agencies.

However, they have not managed to keep out the competition. Within the consultancy sector, companies such as Accenture, Deloitte and PwC threw themselves into the marketing industry. IT giants, such as IBM and Cognizant have come out on top. From a digital perspective, Dept joins the list of new advertisers.

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Everything under one name

Dept is the only company with one logo on the door, according to Dimi Albers, who has been the new CEO of Dept since Thursday. Only design studio Studio Dumbar and Amazon specialist factor-a keep their own name. “As a result, clients spend less money and time on managing agencies. They do not understand if you are one company but have three different email addresses.”

The disappearance of names such as Expand Online, Second Degree or A Friend Of Mine is unique however because 90% of the founders of these agencies are still on board. “It ultimately came from those people themselves”, says Manuel. “They wanted to offer our customers integrated services. That was really something magical.”

Dept is a new type of agency that is a lot bigger than classic advertising agencies, which are already considered big when they have a hundred employees. The only thing that comes close is the Greenhouse Group from Eindhoven. Which has five hundred employees, divided over five digital desks. The group announced Wednesday the decision to bring everything together under the name Greenhouse.

Growth in creativity

Dept is growing towards an increasingly complete range of digital services, says Albers. According to him, he is increasingly able to help clients not only with technology but also with data, strategy and creativity. “We have become Bol.com’s most important agency”, says Albers. “That says, I think, everything.”

According to him, with the first acquisition of Expand Online, it became immediately clear that customers would benefit. “If you know how digital marketing works and how to build a website, that makes the difference.” It works best to buy specialists, says Manuel. “We also tried to set up online marketing ourselves. That has not been successful.”

“No one is a manager here”

The co-founder is not afraid that Dept, with more than a thousand people on the payroll, will become an impotent giant. “It must feel like a local office with forty or fifty people. That is possible because 90% of the founders are still on board. As a result, you can still have a personal relationship with someone who is a partner.”

Moreover, the organisation is very flat, says Manuel. “No one is a manager here. The company is built on trust and on the quality of people. A managerial position doesn’t earn you automatic respect or extra rewards. If Dimi does not do well, he will not get anything done here.”

Dept tries to keep employees happy to retain talent. “Our people are called every day,” says Manuel. He calls the current course ‘healthy’. “Otherwise, we will all be fifty and it will become unaffordable. Everyone here must be busy with the next generation. Who will succeed you in three years?”

In the coming year, Dept wants to strengthen itself in terms of creativity and data, says Manuel. The agency wants to grow further in European markets and expand to the American market. “First, jokes about Accenture and Dept were made. Now they do not like it anymore.”

This text was translated from Dutch. The original article can be found on the website of Het Financieele Dagblad.

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