Blackwood Seven shuts UK office only months after opening

Blackwood Seven, the artificial intelligence media agency, is to shut its London office just months after hiring its first UK staff.

Carl Erik Kjærsgaard: Blackwood Seven co-founder
Carl Erik Kjærsgaard: Blackwood Seven co-founder

Elliot Parkus, the UK managing director, who joined in July from Arena Media, and its two other London-based staff are expected to leave.

A source close to the agency suggested a final decision has not yet been made on staff departures.

Blackwood Seven has been making cuts in a number of markets, including Germany, as it has struggled to grow in the way it expected.

The Danish-based company described the shake-up as "a restructure of its UK operation" and it said Henrik Busch, one of Blackwood Seven’s co-founders, "will continue to service the UK".

The agency will also retain Nick Fox, founding partner at Atomic London, and Bob Wootton, former director of advertising and media at ISBA, as "advisers" in London.

Carl Erik Kjærsgaard, the chief executive and a co-founder, said Blackwood Seven was still growing at 25% globally.

The agency, which was founded in 2013, uses algorithms and predictive analytics to plan and optimise a brand’s media buying, using data sources ranging from Nielsen and YovGov to clients’ historic sales information and the weather.

Kjærsgaard said Blackwood Seven has found more success selling its media planning platform and software, rather than doing the implementation of media-buying.

"We are coming with recommendations," he explained. "Do we need to do the implementation? Not necessarily."

Kjærsgaard added that it was possible for Blackwood Seven’s team to do a lot of the work remotely from Copenhagen, without needing lots of people on the ground in different cities.

"We didn’t need as many people and as many offices," he said, explaining the rationale for cutting staff. "I’m sorry for the people involved. We’re learning and changing our business model."

One person who has dealt with Blackwood Seven suggested the agency may be "ahead of its time" because AI is still in its infancy.

Industry observers said Blackwood Seven’s model worked in Denmark because it is a relatively simple media market but suggested the agency may have faced challenges when it tried to apply its technology to more sophisticated markets such as the UK.

They also suggested that some brands were reluctant to take a risk on a new entrant such as Blackwood Seven and potentially incur significant costs while still paying an existing media agency to handle buying and implementation.

Blackwood Seven said in a statement that "the restructure of its UK operation" is "part of a move to concentrate business activities on its Software-as-a-Service-based AI platform and away from media implementation".

The statement went on: "Our UK vision was never to be a traditional media agency, but to offer advertisers direct access to advanced AI-based comms planning.

"This brings greater efficiency and transparency as well as better insight into, and predictability of, ROI.

"Brands continue to have the flexibility to choose whether to implement this themselves in-house, or via their existing media partners."

Blackwood Seven, which has venture capital backers, said it has won nine clients in the US, including 23&Me, Wish and Atom Ticket, this year.

The agency has also won HI3G in Europe and Australia’s SunCorp.

Kjærsgaard said it has "fantastic support" from our existing investors and "there is no talk at the moment about a transaction to sell ourselves".

He went on: "We would love to take this to the highest level we can take it as an independent company with the existing investors we have."

Blackwood Seven first announced plans to launch in the UK in October 2016 but only officially launched in June 2017 when it was incorporated at Companies House, documents show.

Kjærsgaard admitted in an interview with Campaign last year that London might be "much tougher" to crack than some other markets because "there are too many people who know each other well in this city".

Blackwood Seven recruited a heavyweight line-up of non-executive directors including Fox, Wootton and Jenny Biggam, co-founder of the7stars, to try to crack the UK.