Tag Archive for "finance issues for digital agencies"

New workshop assists digital services businesses to grow and exit

We're delighted to invite experienced entrepreneur, corporate advisor and investor, Matt Costello, to lead a new workshop called Valuing and Growing your Digital Business to be held in Sydney on 14 October, 2015. Mini MBA for digital agencies Bookings now open for the intensive one-day. Key outcomes of this business bootcamp for digital workshop Business Valuations - what acquirers looking for and how they value the digital business Management Dashboards - how to best track the right information in your business. You will build a dashboard on the day Financial Management - understanding the balance sheet, business case developments and financial ratios specific to digital Press ...

Maximising the value of your digital business – and heading for the exit

Consolidation in the digital agency sector continues with the acquisition of digital agency Reactive by consulting firm Accenture in late November. Founded in 1997, Reactive Media was one of Australia’s largest independent digital agencies, headquartered in Melbourne with offices in Sydney, London, New York and Auckland. Highly successful, the agency has marquee clients such as Nissan, Coles Supermarkets, Tesco (UK) and most recently winning Goodman Fielder's digital strategy. The Reactive acquisition caps off a busy year for mergers and changes in the digital/mobile agency landscape with: Ogilvy Australia taking full ownership of digital agency Bullseye with over 100 staff in September DT (part of ...

Coca-Cola rewards agencies for truly innovative work

Coca-Cola is extending its value based compensation structure, giving its agencies the opportunity to earn 30% bonus particularly on innovative projects. According to the article in Ad Age the company is applying a "70-20-10" rule, meaning a standard performance-based compensation for the 70% of work that agencies are most used to doing. In addition, agencies can take advantage of  a guaranteed minimum bonus for the 20% of projects labeled "evolved" or the 10% for projects being tackled for the first time. Plus, there's the opportunity to earn another 5% of the guaranteed minimum in Coca-Cola's new agency bonus structure. I wrote ...

Digital industry salaries predicted to increase in next 12 months

AIMIA’s Digital Agency Salary survey released last week reveals some interesting insights into employment trends in the digital sector. The survey was circulated to AIMIA member digital agencies. Key findings include: Salaries increased on average 7 % in the last 12 months Salaries are expected to increase by 5% in the next year Employee benefits/incentives offered include training, flexible work hours, benefits or bonuses, mobile phone allowance, car parking and extra annual leave. Agencies are sourcing new hires using a variety of channels. Word of mouth was rated as the most efficient strategy by 34% of respondents. This was followed by the use of recruitment ...

How big should you go? Part 2

Continuing the discussion in Part 1, on ways to grow a digital agency. One way is strategic investment; another is pure grit and hard work to grow organically. A largish digital agency with IP around a platform and some hefty media contracts is quietly in the process of securing strategic investment to help it scale up and meet growth targets (including overseas) sooner. This deal will probably stay under the radar so I can’t tell you who it is. And news in the last week or so that independent creative & media agency Razor has sold a ‘significant equity stake to ex ...

How big should you go? Part 1

What’s the best size for a digital agency? This is such an interesting topic, so make sure you read Part 2 (coming out shortly). Recently I’ve been speaking to a few agencies at the 12 – 15 staff level, who have got a great business but struggle to get beyond that level, and asked corporate advisor Matt Costello (who is the workshop leader of MBA in a Day) for his take. Matt points out that: “The main reason is that agency founders are fantastic at digital but don’t necessarily have the capacity or management skills to manage a growing business. They ...

Follow the money: Interview with Matt Costello, Newport Capital on valuing digital agencies

What’s your day job? I'm a Director at Newport Capital Group Pty Ltd. Newport is a TMT sector specialist corporate advisory and investment  banking firm established in 1989. The company has completed hundreds of transactions over the years in capital raising, divestments, mergers and acquisitions in the Technology, Media and Telco space including Digital services and digital media. Transactions that the company have undertaken include; My role here is to lead our clients through the transactions which include preparing the company for due diligence, valuation guidance which often includes an analysis of similar transactions and then researching and approaching potential acquirers or ...

Managing profitability & choose the right billing method

We’ve talked before in previous posts about managing profitability through the continuous management of time, cost, scope & stakeholders. However another way to manage profitability, and particularly your cash flow is to select the right billing method for your agency – and your client. 7 common billing methods Three phase : Scope up front, Production 50% production 50% at the end Top and Tail: 50/50 Start & Finish Pre bill: Requires payment up front Post bill: Requires payment at the end Retainer: agreed fixed amount per month for services Monthly accrued: tally the percentage completed at the end of each month Time & Materials: bill at the end ...