As expected, WPP's GroupM is adding Essence Digital to its agency portfolio. Essence's standing as one of Google's key agency partners drove the deal.
WPP today confirmed that it has acquired a majority stake in Essence, which was founded a decade ago, and currently ranks as the largest independent buyer of digital media.
Under the holding company's ownership, Essence, based in London with offices in New York, San Francisco, Seattle, Singapore and Tokyo, will operate as an independent brand. The shop will also serve as a resource for GroupM holdings such as Mindshare, MEC, MediaCom and Maxus. Terms were not disclosed.
Essence employs 500 staffers and manages $700 million in media spending for brands across 70 markets worldwide. Along with Google, its roster includes eBay, Hewlett-Packard, Viber and Tesco, among others.
"The addition of Essence to GroupM represents significant expansion of our digital expertise, particularly with the Google technology stack," said GroupM chief digital officer Rob Norman.
WPP reported nearly $17 billion in digital revenue in 2014, about 36 percent of the company's total, and wants to blast past 40 percent in the next five years. Snapping up Essence represents another move toward achieving that goal, and represents the latest in a line of digital moves by WPP that also include the June acquisition of data-driven digital marketer Greenhouse Group, and, just two weeks ago, a global alliance with cloud-solutions specialist Acquia.
Observers say the move makes sense for both sides and, from WPP's point of view, snapping up Essence appears to strengthen its relationship with Google. "[Essence] is reported to be Google's main global digital agency—one can imagine there was a lot of interest in the business," says Julie Langley, a partner in M&A firm Results International. "WPP must see sufficient strategic imperative to warrant a strategic price—likely down to a combination of the Google relationship and keeping that business out of the hands of competitors."
Along with its size, which is considerable for an agency specializing in digital media, Essence is also viewed as an innovator in the space. It has won Adweek Media Plan of the Year honors for work created on behalf of Google and YouTube.