Dive Brief:

• Interpublic Group (IPG) has sold creative agencies Hill Holliday and Deutsch New York to Attivo Group, a New Zealand-based marketing services network, according to a press release.
• The two agencies will keep their current leadership and names while maintaining an affiliate relationship with IPG, meaning they can continue to draw on some of the ad-holding giant’s resources. The acquisitions serve to expand Attivo’s U.S. footprint. 
• Attivo previously purchased IPG’s Australia-based 303 MullenLowe and invested in Mediahub Australia. But the Hill Holliday and Deutsch New York deal shows IPG offloading more significant brands, a possible bellwether for agency M&A in 2024. 

Dive Insight:

IPG started the new year with a jolt by selling a pair of iconic agency brands to relative newcomer Attivo, which has predominantly focused on Australia and New Zealand since its inception in 2020. The deal is structured so Hill Holliday and Deutsch New York preserve an affiliate tie to their former parent but suggests IPG is getting more decisive about trimming its portfolio following recent growth challenges. The move could set the pace for other ad-holding groups that are contending with a tighter market for client spending and renewed pressures to streamline their offerings. 

Creative shops have struggled particularly hard in a volatile economy and as ad spending shifts toward digital, performance-oriented channels. Boston-based Hill Holliday was originally bought by IPG in 1998 while the ad-holding group acquired Deutsch New York at the turn of the century. Deutsch New York in October laid off roughly one-fifth of its staff, or 41 employees, Ad Age previously reported. IPG still wholly owns Deutsch LA, which has operated as a separate business unit since 2020.

Like other agencies, IPG received a bump in the earlier stretch of the pandemic as clients sought digital transformation know-how and tried to stay on the ball with fast-changing consumer behaviors. But the more recent tech rout and inflationary pressures have softened demand. IPG digital specialists R/GA and Huge are other assets that have experienced staff cuts, executive departures and restructurings amid the turmoil. IPG missed analyst estimates on revenue and profit in Q3.

Meanwhile, nabbing Hill Holliday and Deutsch New York seriously boosts Attivo’s U.S. profile. The company, which is headed by Cam Murchison, additionally owns agencies Harvey Cameron, Farrimond, Gorilla Studios, Rhubarb Lane and Rainmakers. In a statement, Murchison praised Hill Holliday and Deutsch New York for sharing Attivo’s “entrepreneurial spirit and challenger mindset.”