CLOSE-UP: LIVE ISSUE/TRIANGLE SALE - Triangle exchanges independence for expansion. Triangle is ready for global expansion using Saatchis' network, Ian Darby writes

Another one bites the dust. Publicis' acquisition of Triangle

leaves the UK's top ten independent direct marketing and promotional

agencies looking distinctly lightweight.



It was only a matter of time before Triangle, the largest of the

independents, was snapped up. WPP, among others, had made recent

approaches for the agency that turned 25 last year. Martin Sorrell

intended to link Triangle with J. Walter Thompson, but in the end JWT

cut a deal with rival promotional marketing agency Black Cat.



The founder and chairman of Triangle, Kevin Twittey, guarded against

unwanted predators for years before deciding to sell. He says Triangle

chose Publicis because it was attractive as a group and the chemistry

with Maurice Levy, the Publicis chairman, was perfect.



Triangle's history is a colourful one. By the late 80s it had grown into

a network of 12 offices employing 400 people and was about to go public

when the flotation had to be pulled amid mounting debts. Twittey says

Triangle lost pounds 1.3 million in 1988/89 and only completed its debt

repayments in 1997.



Having steered Triangle back into prosperity, Twittey was faced with the

option of selling or talking to the City again in order to raise the

capital needed to compete once more on the international stage.



Publicis has certainly bought a profitable operation - last year

Triangle made a pre-tax profit of pounds 1.9 million. However,

fluctuations in the agency's profitability - the year before it made

just pounds 582,000 - may have put some suitors off.



Triangle is predominantly a sales promotion, retail marketing and event

company. Some 22 per cent of its income comes from direct marketing. Its

retail and event expertise, built on work for clients including Safeway,

Guinness and Cadbury, is what attracted Publicis.



Publicis intends to link Triangle with Saatchi & Saatchi. Triangle will

continue to operate as a separate company, but will use Saatchis'

network to build a presence overseas. The agency will also work with

Saatchis' clients in the UK where needed, and will refer its own clients

to the ad agency if it meets their requirements.



Explaining the reasons for the deal, Levy says: 'For us it is a

fantastic opportunity to strengthen our position in the UK, while having

the opportunity of servicing Saatchis' clients that are growing in both

the UK and Europe.'



Triangle and Saatchis will sit down over the coming weeks to work out

ways of working together. Tamara Ingram, the UK chairman of Saatchi &

Saatchi, says: 'Triangle is a separate company but it is fair to say

that there will be opportunities. We can offer a network and there will

be mutual learning and training possibilities. They have extra areas,

such as events, where we could use a partner.'



The deal was very much Levy's baby, although Saatchis' worldwide chief

executive, Kevin Roberts, and Derek Bowden, the chairman of Europe and

the Middle East, were involved further down the line. The late

involvement of Saatchis' executives may explain why the details of the

Triangle/Saatchis relationship are still to be ironed out.



Twittey argues that the relationship with Saatchis will work because

many clients still work in silos, placing marketing services

requirements with specialist agencies.



'If a business relies on direct marketing or promotional marketing it is

not going to go to BBH or Leo Burnett or Saatchi & Saatchi,' he

argues.



'Where Saatchi & Saatchi have clients like that we can have a

partnership.'



However, Saatchis' own strength in UK direct marketing and promotional

marketing should not be ignored. As part of its positioning as an

'ideas' agency, it has built a strong integrated offering for clients

that require marketing services support.



In the past year it has won the top awards at both the Direct Marketing

Association and Institute of Sales Promotion awards and has received

more than 20 nominations for the Campaign Direct Awards next month. The

agency employs 127 people with integrated expertise and produces direct

work for clients including the Army, Telewest and Procter & Gamble.



What can Triangle add to this? The agency is split into four divisions:

Storm (retailer services), Perceptor (online), Eye2Eye (production) and

the core sales promotion agency, Triangle Communications. Twittey says

this structure, employing about 200 people, will remain roughly the

same, and that promotional marketing will stay at the centre of the

agency's thinking.



For Triangle itself, the deal provides the opportunity to establish an

overseas network relatively quickly. This will initially focus on a move

into Europe and the Far East.



Twittey believes Publicis was the best option to drive this forward:

'Publicis is not knee-deep in other marketing services companies. WPP or

Omnicom have ten or 12 other Triangles.'



It remains to be seen how successful Triangle's business will be when

exported overseas. As Twittey points out, there are local barriers with

promotional marketing that do not exist with media or advertising. It

will also be interesting to watch how Triangle and Saatchis work

together in the UK given the ad agency's apparent strength in the direct

and promotional marketing field.



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