The Holding Group Model Is Undergoing Fundamental Disruption

Accenture Interactive, S4 Capital and You & Mr. Jones have capitalized the disruption occupying a niche in the market. Today, You & Mr. Jones, the agency and investment group, unveiled a $200 million funding round to a valuation of $1.3 billion.

Founded in 2015, David Jones, formerly the global CEO of France-based holding group Havas, heads the unit, which aims to help marketers compensate for the tech shortcomings of Madison Avenue stalwarts, whose expertise lies in branding advertising. In contrast, You & Mr. Jones leans into a more contemporary model it has trademarked as “brandtech.”

“We defined [sic] ‘brandtech’ as a belief that you could do all marketing better, faster and cheaper using technology,” he added, echoing the mantra of S4 Capital chief Martin Sorrell.

According to Jones, the latest funding round will be used to bolster You & Mr Jones’ geographic footprint, especially in the growth markets of APAC, and build upon its portfolio of investments. This year alone, the group purchased a majority stake in Oliver and contributed $15 million Series B funding into Beeswax. Both companies help clients cut costs.

“Part of that [brandtech] disruption is also about helping clients build their in-house digital capabilities,” added Jones.

He believes the emergence of mobile technologies at the beginning of the decade wrong-footed many of the holding groups. In Jones’ opinion, legacy revenue models and technologies were difficult to adapt to consumers’ rapidly changing media consumption habits.

“We are one of the new disruptors setting out to build this new category (of marketing service providers), but we’re not alone,” Jones wrote in an email.

“When we created the company four and a half years ago we said to our investors that we believed there would be 10 or more companies like ours—although we didn’t necessarily expect the head of the biggest legacy business [Martin Sorrell] to leave last year and start one emulating our positioning!” he continued.

Last year, the Association of National Advertisers noted that 78% of marketers are going to be taking more of their core activities in-house. Jones predicts this trend will accelerate as players from separate industries take an interest in media.

“It’s interesting that with most of the companies we are buying we are going up against Accenture and IBM, not the traditional groups,” Jones added. “In simple terms, it’s a great and exciting time to be a disruptor in the marketing world, but not much fun if you’re a traditional business.”

The You & Mr Jones’ Series B funding round brings its total funding round to $550 million. The round including repeat investor Baillie Gifford. The firm’s head of global equities James Anderson described the traditional agency landscape as “being fundamentally disrupted.”