IMG has acquired New York-based Catalyst Public Relations, adding domestic client PR capabilities for the first time, along with social, digital and content development expertise.
Catalyst, which has 35 to 40 employees and clients including Subway, Dickâ€™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 IMGâ€™s corporate consulting group is expected eventually.
Catalyst will retain its offices in Los Angeles and Charlotte, and company head Bret Werner will become senior vice president/managing director and report to David Abrutyn, IMG senior vice president and global managing director of consulting. In addition to Werner, the Catalyst management team of Bill Holtz and Ted Fragulis will continue in their roles, only now under IMG ownership.
Terms of the deal, which closed last week, were not disclosed.
Abrutyn said he had been looking to add capabilities like Catalystâ€™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.
â€œWe 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,â€ Abrutyn said. He added that IMGâ€™s internal communications function will operate separately.
PR Week, which named Catalyst its 2012 â€œSmall Agency of the Year,â€ had previously estimated the agencyâ€™s revenue at $5.9 million for 2011. Werner said Catalystâ€™s 2012 revenue was in the â€œ$10 million range,â€ adding that digital and social revenue increased 140 percent in 2012, with that business â€œmoving close toâ€ 50 percent of Catalystâ€™s revenue.
â€œPeople 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,â€ Werner said.
Catalyst launched as Pyramid Public Relations in 2005 through investors including principals of the former Alan Taylor Communications, who remained as the agencyâ€™s majority shareholders up until the sale to IMG. The agency rebranded as Catalyst Public Relations in 2007.
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 PRâ€™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 Catalystâ€™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 â€” company CEO Mike Dolan admitted in a SportsBusiness Journal interview last year, â€œWeâ€™ve been behind the curve. â€¦ The error IMG made was trying to build a big digital group internally.â€ IMGâ€™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.
â€œOne of the primary marketing priorities for brands in 2013 is creating sustainable engagements with their target audience via digital, mobile and social,â€ said Tony Schiller, a partner at Paragon Marketing, who heads that agencyâ€™s corporate consulting practice. â€œPR 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.â€
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.
â€œWe have 40 people dedicated to nothing but social media work and itâ€™s growing,â€ Belmont said. â€œSocial, 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. Itâ€™s become a primary question and need for all of our clients.â€