Flurry of mergers marks Pittsburgh marketing industry
February 19, 2014 10:38 PM
Campos Inc. president and owner A.J. Drexler and Yvonne Campos, CEO.
By Teresa F. Lindeman / Pittsburgh Post-Gazette
The elevators work hard at Campos Inc.'s office on the Boulevard of the Allies. The marketing research firm runs two shifts so staff can work into the evening adding to the list of more than 20,000 people willing to respond to questionnaires. There are also regular arrivals of those recruited to participate in focus groups in two rooms tailored for that research.
And now the movement of people through the firm includes a change in leadership at the top, as founder Yvonne Campos sold the business at the end of last year to A.J. Drexler, former president and lead strategist at ad agency Big Picture Communications. Financial terms weren't disclosed.
"It's all about timing," said Ms. Campos in a recent interview as she and Ms. Drexler talked about the changes in recent months that included the absorption of the clients of a longtime competitor, Station Square-based marketing research firm Direct Feedback -- an opportunity that turned up in the midst of the Campos transition process.
Whether it's a response to dramatic changes in how marketing is being done or an indication of a generational shift in the Pittsburgh business community, the timing lately has been right for mergers and acquisitions.
In December, two South Side agencies -- Gatesman+Dave Inc. and Quest Fore Marketing -- announced plans to create a single agency under the Gatesman name with more than $13 million in agency revenue and about 80 people on staff. John Gatesman, Dave Kwasnick and Shannon Baker would be the principal partners, while Quest Fore CEO Ken Cuccinelli moved to a consulting role. Quest Fore was founded in 1976, while Gatesman opened in 2006.
A month earlier, Downtown-based agency Fitting Group was absorbed by Bloomfield small business consulting firm C-leveled, creating a combined company with about 30 employees. Fitting Group was founded in 1986 by Andrea Fitting.
Campos was founded in 1986, too, and Ms. Campos had been looking at exit strategies for a number of years, talking to people in town about potential deals. "Either the timing wasn't right or the relationship wasn't right," she said.
This time things did work out. The brand can continue and the staff of about 15 full-time professionals can keep their jobs. Ms. Campos is sticking around for a while, too.
Gatesman+Dave began talking with the Quest Fore management about a possible merger last summer, said Mr. Gatesman. "The more we talked, the more we started to realize how good a fit this was."
Quest Fore was particularly appealing for its technology group, which Mr. Gatesman called "a real gem." And clients of QuestFore now have access to services such as public relations and social media that Gatesman+Dave offers.
The prime reason to do the deal was to enhance the capabilities offered by the surviving agency, Mr. Gatesman said, adding that the impetus for such mergers can vary. Larger companies want to expand in strategic ways, while smaller ones want to protect what they've built and their employees.
"A lot of times it's driven by folks who are looking to dial down their careers," he said. "They need succession plans."
The two South Side agencies have worked hard to make the marriage go smoothly. They held get-to-know-you sessions for the employees before the deal closed and set up extended happy hours.
Ms. Fitting isn't retiring anytime soon, but she concedes the succession issue was a factor in the decision to merge. Also important, she said, was the role Fitting Group could play in C-leveled's work with startups, which includes helping firms find capital that can pay for services they need to grow. That includes branding and marketing expertise.
"They needed what we had to offer," said Ms. Fitting.
Over at Campos, the acquisition of Direct Feedback brought back a former employee who had left to work at the marketing research competitor. Kevin Edwards is helping clients from that company make a smooth transition to Campos.
The long-term goal is to grow the business to reach the ranks of national players in the field, which Ms. Campos defined as at least $12 million in annual revenue. Neither she nor Ms. Drexler disclosed Campos revenue, but she said it hasn't hit that level.
The business has changed since Ms. Campos started it by mainly offering focus groups and one-on-one sessions to help clients understand consumer reaction to products and marketing. It wasn't long before the company began doing survey work and other types of research.
Now most of the surveys are done online and one of the driving forces is the use of the treasure trove of data generated by the digital shifts in advertising, shopping and entertainment. Companies need help taking that data, interpreting it and drawing conclusions that drive strategy, said Ms. Drexler.
As for the transition at Campos, over the past couple of months the new owner has been making the rounds of agencies in town, trying to both find out what needs they have and to reassure them that the company can serve them all evenhandedly.
Ms. Drexler knows a lot of people through her time at Big Picture Communications, but Ms. Campos has even more people to introduce her to.
"I've gained five pounds having lunches already," Ms. Drexler said, jokingly.
Teresa F. Lindeman: firstname.lastname@example.org or at 412-263-2018.
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