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SBJ/January 7-13, 2013/Marketing and Sponsorship
IMG acquires Catalyst, adds PR capabilities
Firm brings expertise in social and digital
Published January 7, 2013, Page 1
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Catalyst, which has 35 to 40 employees and clients including Subway, Dick’s Sporting Goods, Under Armour, Timex and Powerade, will keep its name and offices in the Empire State Building for now, although further integration with IMG’s corporate consulting group is expected eventually.
Terms of the deal, which closed last week, were not disclosed.
Abrutyn said he had been looking to add capabilities like Catalyst’s for a few years, but first began to speak in earnest with Werner about the acquisition at the SportsBusiness Journal/Daily Activation Summit last May in Chicago. IMG and Catalyst had teamed to work with several clients previously, including RBS and DHL.
“We feel that this acquisition makes us the only full-service sports, entertainment and lifestyle marketing agency, and for Catalyst we see tons of opportunity for them to plug into our overseas business,” Abrutyn said. He added that IMG’s internal communications function will operate separately.
PR Week, which named Catalyst its 2012 “Small Agency of the Year,” had previously estimated the agency’s revenue at $5.9 million for 2011. Werner said Catalyst’s 2012 revenue was in the “$10 million range,” adding that digital and social revenue increased 140 percent in 2012, with that business “moving close to” 50 percent of Catalyst’s revenue.
“People have approached us before about an acquisition, but the power of the IMG brand, the resources IMG can supply, the cultural fit and the ability they give us to scale globally made them the right choice,” Werner said.
|Catalyst head Bret Werner (right) will become senior vice president/managing director and report to David Abrutyn (left).
Adding PR capabilities is something nearly every sports marketing agency without them has considered. However, few of the larger agencies have such capabilities. This deal may mark a tipping point, suggesting that PR’s role as the social/digital/mobile expert in many companies has elevated its importance well beyond its traditional role of bread-and-butter publicity machines.
Accordingly, several agency principals suggested that Catalyst’s expertise in digital and social media, as well as content development, were principal factors behind the deal. Further, IMG has lagged in those areas — company CEO Mike Dolan admitted in a SportsBusiness Journal interview last year, “We’ve been behind the curve. … The error IMG made was trying to build a big digital group internally.” IMG’s move to acquire more social and digital capabilities is indicative of the importance clients have placed in supporting sports and entertainment platforms with more cohesive and effective social and digital marketing programs.
“One of the primary marketing priorities for brands in 2013 is creating sustainable engagements with their target audience via digital, mobile and social,” said Tony Schiller, a partner at Paragon Marketing, who heads that agency’s corporate consulting practice. “PR agencies are at the forefront of understanding how to optimize digital technology, especially social media, to create connections between brand and consumer. Any agency that is creating large marketing platforms that include strategic activation would benefit from having PR expertise in-house.”
Dan Belmont, president of The Marketing Arm, said his agency was creating a new client offering to support these types of efforts, called Social Sponsorship.
“We have 40 people dedicated to nothing but social media work and it’s growing,” Belmont said. “Social, digital and mobile has gone from being a portion of every sponsorship to becoming the lead program, in many cases. PR has owned social up to now, but I think the next development is that it has become so important that every agency will have a piece of social media. It’s become a primary question and need for all of our clients.”