McKim Communications, one of the oldest ad agencies in the country, is merging with Sherpa Marketing, a firm whose expertise is in the very modern area of digital marketing.
The two Winnipeg firms will continue to operate under their existing brands.
The merger — no cash has changed hands — gives each firm an element of expertise that each of them was looking for — McKim has been known for its strategic consulting and creative team, and Sherpa is a digital marketing specialist.
"I recognized three to four years ago that we were just not doing a good enough job in the digital marketing sphere," said Peter George, president and CEO of McKim. "We had focused far too much on the creative and strategic side of the business."
He said after meeting Marty Fisher, the president of Sherpa, through a mutual friend, "it did not take too long to realize it was a great fit."
And from Fisher’s point of view, it has always prided itself as being competitive with the largest national firms on the digital side of things aided at least in part by its roots in Kitchener-Waterloo, where the firm continues to maintain an office.
"I always like to throw this stat out — 94 per cent of purchase intent is informed through internet search," said Fisher. "But if you don’t have compelling stories and creative that can capture and hold people’s attention, we can do all the knob twisting you want on the back end you are not going to compel people to choose your brand."
Sherpa has always had software developers on staff and Fisher said the proximity to the University of Waterloo and Conestoga College in Kitchener gives them a larger talent pool to draw from.
The merger is between two award-winning firms of just about the same size with a combined workforce of about 50 employees.
The two started talking to each other last fall and have been working on campaigns for each others’ clients for several months. They believe the merger will leverage their suite of service offerings to give the firm a better chance to compete on national accounts.
The advertising industry suffered a serious blow at the start of the pandemic in the spring of 2020. (Marketing is often the first area to have budgets slashed when economic downturns occur.) Both credit government assistance with allowing them to keep most of the team on staff. George said McKim is not back to its pre-pandemic size, but it is profitable again.
Fisher said, "Marketing is like the canary in the coal mine. The dollars went almost to zero immediately when people started freaking out about COVID and the stock market tanked."
But Fisher believed the ensuing reliance on digital communication and Zoom calls has made national brands less resistant to working with ad agencies from out of town.
"This merger gives us the domain and bench strength to really go after national account work as opposed to just being somewhat insular here in Manitoba," he said. "It is one of the doors that has opened during the pandemic."
The two firms also provide an entrée into new clients in vertical markets that each of them did not have much exposure to. For instance, Sherpa has clients in the agricultural industries, a sector McKim does not have experience in, and McKim has created a separate division to handle work for post-secondary institutions in Manitoba and elsewhere across the country.
"At the moment we don’t have any national consumer brands but that is something we are working on," said George. "Our objective is to grow and we feel putting the two companies together gives us a great platform to grow both companies."
Sherpa has been around for 25 years and McKim opened in 1889, making it the oldest ad agency in the country.
"The plan is that this merger will mark the beginning of another new chapter for McKim," George said.
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.