Nick Emery & David Jones interview: There’s a gap in the market for in-housing media

Nick Emery and David Jones have said they see “a gap in the market” for a new type of in-housing agency partner that can provide “full-funnel”, “strategic” media services for clients and they believe their new venture, You & Mr Jones Media, can become a global business with US$500 million in revenues by 2025.

Emery, who departed as global chief executive of Mindshare in October 2020 and is founding partner of You & Mr Jones Media, said: “I’m not looking to replicate Mindshare. That was for a different era, with a different set of skillsets. We’re not trying to replicate the agency business.”

The plan is to launch in Europe and the United States simultaneously and expand globally.

Emery and Jones acknowledged in a joint interview with Campaign that they faced competition from other digital media and performance marketing agencies but suggested many of these companies tended to focus on a “niche” and were “executional” whereas their new business will have breadth.

“There’s a gap in the market for a full-funnel, strategic in-house partner – I really don’t think that exists,” Emery said, adding the “shift to privacy and first-party data is a driving force for clients to take things in-house” and demand greater “transparency”.

The key for You & Mr Jones Media is to make its offer for clients “addressable, shoppable and personal”, according to Emery.

“It has to be personal,” he maintained, while acknowledging the impact of Apple’s recent move to reduce tracking and Google’s decision to drop third-party cookies. 

“Everyone is overblown about [the risks of] personalisation but at any given time people want to be both private and they want personalisation”, which is why clients are increasingly looking to use first-party data.

There is also scope for greater investment in and smarter use of data and technology that could reduce “wastage” and generate big savings – “probably up to 40%”, Emery claimed.

“I’m not criticising technology but I think there’s inefficient use of technology which is all round. It’s not just at agencies but at clients as well – in terms of how they approach things.” 

“We want to move fast”

Jones, the former global chief executive of Havas, has already built You & Mr Jones into a brand technology group worth more than $1.36 billion since its launch in 2015 and he said a move into media buying was “logical” after establishing itself in other areas such as creative content, influencer marketing and data.

Emery, whom Jones described as a “rock star” because of his 23 years at WPP’s Mindshare since its launch, has a “war chest” of up to $300 million to make acquisitions in the media space.

“We want to move fast both in terms of building a team and making some acquisitions,” Jones said. “If we found an amazing company now that was going to cost the entire $300 million, we would spend it all now.”

You & Mr Jones’ flagship investment so far has been the 2019 acquisition of a majority stake in Oliver, which specialises in running in-house agencies for big clients such as Unilever.

Jones is hopeful that You & Mr Jones Media can grow quickly by drawing on the “learnings” from the Oliver model and other parts of the group, which have already shown that they can use technology to deliver “better, faster, cheaper” results.

“I’m mirroring what we’ve done in content,” Jones said, adding “you could view that as a parallel to what we did with the original company” in terms of lining up the investment and then acquiring to scale the media operation.

Not motivated by revenge

Campaign revealed in October 2020 how WPP had sacked Emery for a prank during a video call with Mindshare executives, when he took his device to the lavatory, and he admitted he had “regrets” but insisted he was looking forward and dismissed suggestions that he might be motivated by revenge.

“No, I’m not interested – I’m really not,” Emery said. “Life’s too short. You have to look forward. It’s gone. It’s six months ago.”

He added he did not want to criticise his old company. “It’s much more about looking to the future and making it optimistic,” he said, hence his desire to stay involved in the media business. “Even if I won the biggest lottery in the world, I would still want to do this.”

Emery, who revealed he wrote an 80,000-word novel about advertising during the past six months (see postscript at the end of this article), did not have a non-compete clause when he left WPP. 

He said he could look to hire some of his old colleagues, although Jones said: “I’ll bet you Nick’s first hire doesn’t come from Mindshare.”

Industry observers will be closely watching You & Mr Jones Media because Jones and Emery, who are both British, have a track record of building global businesses.

David Indo, chief executive of ID Comms, a consulting firm that runs global pitches, said: “There has never been a better time to launch a modern, future-facing independent media agency. As the media function is elevated higher on the corporate agenda, advertisers have become hungrier for choice within the media services sector. 

“Any new proposition that can successfully position media as a key engine in delivering business growth will immediately generate interest and provoke enquiries. 

"The bigger challenge for Nick will be convincing advertisers that operationally and at an executional level they are set up for success.”

Here are the highlights of the Emery-Jones interview:

Who came up with the idea of You & Mr Jones Media?

“We have always intended to build a media division,” Jones said. “We are five years old and you can’t do everything on day one. We’ve always set out that we want to be the best in the world at connecting content, data and media, using tech and artificial intelligence.

“We’ve built what I honestly think is the world’s number one, new-model content capability – that’s a combination of Oliver, which is the market leader in in-housing, and our people-powered marketing businesses: Collectively is probably one of the top three global influencer companies and we’ve got a great data business in Fifty-five.”

Having built “real scale” in content, it was “logical” to move into media and You & Mr Jones has had “conversations with some interesting companies” but it was “lacking” a media leader from within the existing organisation, Jones said.

“We wanted a star to lead that for us. Nick was available and on the market and we met. There was an amazing synergistic fit in that. Nick was probably intending to go and do something different [after Mindshare] and disrupt media and we’ve always intended to build a big media division,” Jones added.

There has been industry chatter that Emery had already developed a proposition for a new, media agency-type business and had been speaking about it to a number of companies in recent months.

Emery said he had “lot of conversations” – ranging “from more established players to maybe doing something with smaller, newer areas” – but there was “nothing concrete”.

He said client demand was changing – a quarter of a century after media agencies separated from creative shops and he was involved in WPP’s merger of the media departments of JWT and Ogilvy to form Mindshare in 1997.

“It does feel to me that there’s a shift happening now – that clients want a kind of new way. They want something new,” he said.

“They’re bored of the merry-go-round of pricing-led pitches. The whole world’s shift to privacy and first-party data is a driving force for clients to take things in-house. They know they need to take it in-house. They know that media’s too important to outsource. They want it to be more strategic. They don’t want it to be executional and just based around individual platforms. 

“There’s a whole wave of new clients who want a better and more holistic service, built around them and built in-house to deliver them a new kind of approach. You build it around in-housing, you base it on transparency, you found it in technology.

The “vision” is “we want to make sure everything is addressable, we want to make sure everything is personal, we want to make sure everything is shoppable and build a new organisation – not a legacy organisation that is built around trading volumes”, Emery said.

How easy will it be to build a global media operation?

Jones has been a longstanding critic of agency holding companies such as WPP and Havas since he launched You & Mr Jones and he claimed 2020 was a “disaster” for them as they saw revenues decline by an average of 9.2%.

They are “held back by legacy” that “prevents” them from innovating, according to Jones, who contrasted their fortunes with You & Mr Jones, which claimed 27% organic revenue growth in 2020, and former WPP chief Sir Martin Sorrell’s new venture, S4 Capital, which increased by 19% on a gross profit basis.

“If you are a digital and tech business you did not decline last year – it was impossible. Every business that is genuinely digital and tech had a fantastically strong year.”

Even before the pandemic, the holding companies had become “low or no-growth businesses” and saw tens of billions of dollars wiped off their market capitalisations while adtech businesses such as The Trade Desk have boomed, he said.

“There’s not a single example you can find in history of when an industry undergoes a massive disruption the market leader before the disruption is the market leader after,” Jones claimed.

The holding companies are “still generating a lot of revenue – our thesis isn’t that, ‘Oh my God, they disappear tomorrow’, but they are increasingly less relevant and increasingly less able to deliver for the big brands, and that’s why their numbers are terrible. We would view organic growth of under 20% as poor and a problem”.

He was bullish about the media opportunity and played down the suggestion that it’s not easy to build a global media buying agency operation at scale from scratch.

Jones said: “I would argue that it’s actually really easy to start something new and be disruptive. The question is how big can you build that to be?

“We’re just sitting in a market where brands are crying out for it. You have clients who are desperate for a new model. They want a model that has got the latest tech in that, that’s built on transparency. They’re more and more excited about the concept of in-housing to take back control.

“What we’ve got to do is execute well. Everything is sitting there, lined up for us to create something very successful.”

Emery added: “This is not from scratch. There is the [financial] backing that David has, which is not insignificant, to go out and acquire. There’s plenty of talent in the market that is quite disaffected with the current world. There are lots of technology partners that we can work with.”

He also expected to draw on other companies from the You & Mr Jones portfolio such as mobile marketing firm Mobkoi, creative content shop Gravity Road and strategic consultancy Blood, plus minority investments such as Jivox, a digital personalised advertising platform, and Elsy, a data analytics firm.

Jones said: “That’s what’s exciting about this. It’s not that we know or understand anything [that is radically different from other players in the market] or we’ve got this genius idea that no-one else has.

“It’s just the ability to execute that at scale because the backing and the capital we have to go build it means you can actually deliver the new model but you can deliver it at global scale.”

Client demand is “why we’ve seen such an acceleration in our business on the content side” because “we can deliver globally for the world’s biggest brands” such as Unilever, he said.

By 2025, You & Mr Jones should be a “leading player across the triopoly” of Google, Facebook and Amazon and other platforms that emerge, Jones predicted. 

How much do clients want to in-house media when it is so complex?

Jones said it was wrong to think that most clients wanted to in-house media. Rather they will benefit from having media services on-site and close to the centre of their business, but managed by an outfit such as You & Mr Jones Media.

“In all of the articles about in-housing, people don’t understand the Oliver model or the model we’re going to apply to media. People think you either work with an agency or the client takes it all in-house themselves.

“Taking it all in-house yourself as a client is complex in content and super-complex in media. But our model – what we’re going to do – is build it in-house for you but it’s our people, our process and our technology [inside your organisation].

“So [as a client] you’ll get all of the benefits, as if it’s in-house, but actually we’re going to run it for you, and so you don’t miss out [when it comes to keeping up with innovations in adtech and martech].”

And “if you’re having talent problems, it’s for us to fix, not you to fix” because You & Mr Jones supplies the staff.

“Whenever I read the in-housing articles, I’m always torn,” Jones continued. “On the one hand, they’re writing about in-housing without understanding the Oliver proprietary model, but on the other hand maybe I shouldn’t point it out because the more that people [in other agencies] think that in-housing is shit and they [clients] shouldn’t be doing it, [I think], ‘Yep, keep going, that’s brilliant [for us].’”

Think of in-housing as like a poet or artist “in residence”

Emery said there was an opportunity to elevate the role of in-housing media. 

Existing players tended to be focused on “reselling” on one platform such as Google or Facebook, rather than “across platforms”, and “it’s very executional rather than strategic”, he claimed.

Emery suggested a more strategic approach was akin to the “idea of creating residencies for clients”, explaining: “If you think about a poet in residence, an artist in residence, a DJ in residence, you can create different, bespoke residencies for clients, based around a cross-platform, permanent relationship that is transparent and in-house. 

“I don’t think anyone is pulling that together. They might have the buzz words and they do bits of that but they’re not really doing that [properly]. What they’re really doing is reselling the platform or just selling more for Google or selling more for Facebook. They’re not doing it across the piece [of the whole digital marketplace].”

The role of transparency

Jones and Emery both talked about transparency – a symbolically important word given scrutiny over historic media-buying practices as some agencies bought inventory from media owners and resold it, sometimes at a mark-up, to clients.

You & Mr Jones Media has “no intention” of reselling inventory in such a manner, Emery said. “If clients ever wanted us to do that, it would be at a client request and it would be transparent, so they could see how it all worked.”

More generally, it is important for agencies to give clients “visibility about all elements of the tech stack”, so that advertisers know how their adspend passes through the digital media supply chain.

Some of their money might “genuinely” need to go towards preventing fraud and weeding out bots and using the right tech to optimise the efficiency of their campaigns, he pointed out.

Media buying has suffered from trust problems and Emery said his desire to look forward was linked to transparency.

“I do feel we’ve made a business that people don’t trust,” he said, noting there had been an explosion in “malware”.

Acquisition targets

You & Mr Jones has financial firepower but “we have always been very selective so we’re not rushing out there to buy as many companies as we can in the next five minutes”, Jones said.

His privately held group has made about half a dozen acquisitions and invested in another 20 companies, including social media firm Pinterest and augmented reality company Niantic, since 2015.

Some of those investments have generated good returns, allowing Jones to raise more money.

You & Mr Jones does not publish full accounts but is now worth significantly worth more than its $1.36 billion valuation at the time of its last fundraising more than a year ago, according to Jones, who said it was “strongly profitable” and had “no debt”.

One clue is in the accounts for Scottish Mortgage Investment Trust, a FTSE-100 investor in Tesla, Amazon and You & Mr Jones, which shows the value of its shareholding in Jones’ company trebled from £50.7 million in March 2019 to £162.8 million in September 2020 – at a time when most of the big agency groups were struggling, even before the pandemic.

Jones maintained that “as we’re getting bigger, our organic growth is accelerating”, noting 27% growth in 2020 followed 25% in 2019.

There are “two industries” – “the old, traditional world is declining and the new tech and digital world is accelerating”, he said. 

“We wouldn’t want to acquire a traditional media company – you won’t see us suddenly rushing off and making a bid for Horizon,” Jones added, referring to the biggest US independent media agency.

“What we focus on is the always-on, social, digital, ecommerce” and “100% digital and mobile” – “in exactly the same way as in content, we don’t make TV commercials,” he said.

Still, finding the right target and concluding a deal won’t be easy when there is a growing number of buyers, including private equity, consulting and tech giants and other independents, plus the established agency groups.

“Any company that we may want to acquire is doing brilliantly, is very profitable, has no need to sell” and there are likely to be many other potential buyers “who would also like to acquire them”, Jones said. 

Emery says holding companies have been too “slow” to change

Jones’ negative view of the holding companies is well-known but Emery was at WPP until six months ago, so has he suddenly undergone a Damascene conversion or was he biting his lip during his final years running Mindshare?

It wasn’t a case of “biting my lip”, he said, but his view about the need for change has been “informed by what I learned there”.

Holding companies have been restructuring, Emery noted, “but they also spend a lot of time talking about the changes and they talk about, ‘Should we centralise? Should we decentralise? Should we do this? Should we do that?’ They’re just slow, unfortunately.”

He stressed: “I love everyone at Mindshare – they know that. I used to write to them every Monday, telling them I love them all, and I don’t wish them any harm at all. 

“This is not just about WPP. Generally, in all of the holding companies, there are some amazingly talented people in the agencies but there are just some amazingly mediocre management managing them.”

The agency holding companies are struggling “because they were built for a different world” and talent is leaving and “looking for something new and interesting”, he said, echoing Jones’ view.

“What’s attractive to me is to disrupt the industry and create something new,” Emery went on. “You know I like to stir things up wherever possible and do something new and interesting. 

“We’ve also let media become quite a boring business and quite an executional, transactional business and it really shouldn’t it be. It is everything from [Disney’s super-hero franchise] Marvel to [online messaging platform] Discord and it should be really exciting and we don’t make it exciting.”

“Regrets” about Mindshare exit

Emery admitted his lavatory prank that led to his sacking on 14 October “was a silly and stupid thing to do”. 

He had “regrets – in the sense that I certainly would not mean to offend anybody or do anything that would upset anybody. It was meant to be light-hearted, it was meant to be a joke, it was certainly not meant to be offensive”.

Some industry figures told Campaign at the time that they thought his immediate sacking, with little explanation from WPP, was brutal.

“I’m not going to talk about whether I was treated fairly or not,” Emery said. “So many people had so much death and distress over the past 12 months, the last thing they want to do is hear me moaning about my lot. I’m not going to get into that.”

Jones said he had no concerns about hiring Emery: “Our off-the-record diligence revealed everybody in the company he was at [ie. Mindshare] felt he had been treated very unfairly. It’s to Nick’s credit that he’s never said that or suggested that.”

Emery said he was looking forward to building a new business, rather than having to defend a lot of accounts as an incumbent – a nod to how three of Mindshare’s global clients, Unilever, Facebook and Dyson, have put their accounts into review in the past month.

“If I was still there, 30% of my business would be up for pitch,” he noted. “Well, it wouldn’t be – because I would still be there. So it wouldn’t be up for pitch.”

Still, Emery said he was not seeking revenge: “You’re not going to hear me doing what other people have done when they’ve left and criticising and having a go [at WPP].”

Jones said: “If Nick was really about revenge, he wouldn’t come to us. We don’t want to touch a huge chunk of what the holding companies do.”

Despite wanting to move quickly, Emery does not expect to approach clients about contesting any of the big global media pitches that are already under way: “Convincing as I am, I think they might want some expertise behind me."

You & Mr Jones vs. S4 Capital?

Jones praised S4 Capital, saying the reason that both You & Mr Jones and Sorrell’s company have been “as successful as we have” is because both are focused on digital and “the client demand for this is so enormous”.

But Jones also took a potshot, noting Emery’s departure from WPP was “relatively minor compared to what someone else did to leave a particular holding company and set up their new business” – a dig at Sorrell’s exit in 2018, following an allegation of personal misconduct, which he denied.

S4 Capital’s stock market value has passed £3 billion ($4.2 billion) in less than three years, which means it has grown faster in valuation terms than You & Mr Jones.

Is private ownership holding back Jones’ company because it’s not on the stock market? 

“There are two ways you can look at a business – you can look at in terms of its valuation or its value to clients and brands and what it’s delivered,” Jones said. 

“We’re a long way ahead of S4 in terms of our ability to deliver globally at an enterprise level for some of the world’s biggest companies. You hear them about talking about landing whoppers. Our large clients are significantly bigger and are global and we have a lot of them.”

And, comparing You & Mr Jones’ range of services and investments to those of S4 Capital, he claimed: “I think we have more tech in ours – [it’s] more than just digital.”

As for the future, “we have a number of options open to us,” Jones noted. “For the moment, we believe remaining a private company is a good option. We are very lucky that we have six or seven big investors who collectively probably have a trillion dollars under management so as long as they think we’re doing a good job, there’s more than enough ability to tap into the capital that we need to grow and expand.”

Jones said: “We are very much setting out to build a business for the long term. It’s great what we’ve achieved so far but honestly think we’re only just getting started.”

He went on: “In reality, this is not about us versus S4. This is the disruption of an industry and the creation of a new category. 99% of the business is still sitting in that old category and what we’re doing, what S4 is doing, and what I’m sure you’ll see numerous entrants come along and do, is just take share from that old category. 

“Clients are looking for people who can come in and deliver a new, disruptive model at scale.” 

Postscript: Emery’s unpublished advertising novel

Emery is 55 and just a few months older than Jones – both were born in 1966.

A Labour party member since the age of 17, Emery spent a year as a rock musician in his youth, including playing for Jesus and Mary Chain.

After his shock exit from Mindshare after 23 years, “I spent most of my time writing a book,” he said.

“It’s fiction – 80,000 words – about a self-centred and narcissistic adman who dies, goes to heaven and realises there’s another worldly body that controls advertising that’s run by Cornelius Vanderbilt, Rupert Murdoch, Robert Maxwell and various other people. It involves the Egyptian Book of the Dead, talking llamas, meerkats and séances.”

The novel is “probably atrocious” and doesn’t have a title because the one he picked “has been taken”, he said. “Now I am working, I should probably bury it in the back garden and publish it posthumously.”