The Disruptors: SEC Newgate Builds A "Group Of Entrepreneurs"

After decades of domination by the big publicly-traded holding companies (and Edelman), the public relations agency business is ripe for the kind of disruption that has shaken up adjacent businesses, from advertising to the media itself. In this series of articles, PRovoke Media founder Paul Holmes identifies some of the firms aiming to disrupt the PR market, and talks to some of the individuals spearheading that disruption.

In the third article of this series, we talk with SEC Newgate global CEO Fiorenzo Tagliabue, whose firm has in the past five years acquired international corporate affairs firm Newgate, US public affairs specialist Global Strategy Group, Mexican creative shop Another, and most recntly leading Greek independent V+O as it builds a global presnce.

Paul Holmes: Tell me a little about your background before you came into your current role.

Fiorenzo Tagliabue : I graduated from Florence University with a degree in philosophy. In my previous professional life, I was involved in the publishing business. I began by managing a free radio, then I founded an independent magazine and eventually I was appointed managing director of a daily newspaper in Italy.

Then, in 1983, I had the opportunity to run the startup of the Vatican Television Center (today is known as Vatican Media), entrusted to me by Pope John Paul II. My main task was to enhance the visibility and awareness among all broadcasters globally and among those interested in getting images of the Pope and of his travels.

PH: What did you see during that time that convinced you there was an opportunity to build something new and different.

FT: I established SEC in 1989 when I was 39 years old. At that time, the Italian market was dominated by the local branches of international groups, with very few exceptions. Italy was a small market in our industry, and there was no local company engaged at international level.

Our brand SEC (which comes from the Latin Societas Europaea ad Communicationes) had both a purpose and a program: to build a PR agency rooted in the European foundations of our job, which stems from the ideas of two major thinkers: Aristotle and Cicero. Following this “classical” approach, we were pioneers in focusing on “‘reputation” (a term that derives from the Latin reputare), long before the emergence of ‘digital reputation’ issues underscored the importance of this intangible asset.

PH: How will what you are building now be different from the existing market leaders?

FT: We want to be a worldwide leader in corporate and public affairs, recognizing the synergy between these two practice areas can help our clients to grow and protect their businesses and reputations. Being a sort of engineer for our clients’ reputation is what we do and where we provide our advice. And I am using ‘engineer’ purposedly here, because we use a data-driven approach to devise our clients’ strategy.

Another key element that sets us apart is that we are committed to contributing to increase our clients’ reputation, no matter how big or small they are, in an increasingly complex and demanding world. And we strive to deliver consistent quality and approach in each country where we operate. We pay extra attention to put the achievement of expectations of our clients first, whilst maintaining our uncompromising dedication to quality and effort, independently of the financial result (which is, of course, essential).

PH: Tell me a little about Investcorp, their vision for the communications business, and what makes them the right partner for SEC Newgate.

FT: Investcorp is the private equity firm we have chosen as our financial partner. They have an important portfolio of companies and great experience in the “people business,” including communications and hi-tech services. As a robust and patient investor, Investcorp shares our vision regarding the significance of all those activities.

Beyond financial backing, we sought Investcorp’s advice and support to accelerate our growth in an increasingly competitive PR market. Let me also mention THCP, our first PE Fund, which remains a shareholder and that played a decisive role in our delisting

PH: What made the firms you have acquired so far attractive to you? And what will you be looking for in any future acquisitions?

FT: Given we are a people business, we look at the founders and key people in each organization. I’m used to saying that before being a group of companies, SEC Newgate is a group of entrepreneurs with deep experience of their respective markets, a vision and the wish to join a group that shares their values and spirit.

While we continue to pursue acquisitions to enhance our footprint and increase our expertise—insight and AI are two areas of interest—our priority today is integration and organic growth, scaling up the wealth of knowledge, expertise and tools within our group. And addressing the challenge of international business, we are investing in a team based in the US to foster our growth.

PH: Are there disciplines outside the traditional public relations business that you anticipate joining the SEC Newgate family?

FT: Research and data analytics are integral in some of our geographies, especially the USA, Australia, UK, Italy and Colombia. Since 2019 we have been investing in AI in Italy, where we developed TRUE: a tool, scalable at international level, that allows to measure the reputation of a brand in real-time based on machine learning algorithms and principles.

Last but not least the ESG teams in different countries help our clients better understand the opportunities ESG provides for a company and how to effectively communicate their engagement on these issues. Since 2021 we have produced the ESG Monitor, a survey conducted across 12 countries to gauge the perception on Institutions and large corporates towards ESG issues. Furthermore, we started offering a global service to support companies at COP summits since last year.

PH. What is your strategy for talent retention? Do you expect agency founders to stick around for the long term and how will you incentivize them to do so.

FT: More than a retention strategy, we have a corporate culture that aims at nurturing the talents and unique qualities of each individual, without internal competition but rather by sharing a common responsibility. We prioritize attention to the personal and private dimensions, in the different stages of life, recognizing the importance of a work-life balance; this allows not only to live family responsibilities with more serenity, starting from parenthood, but also to bring into play one's passions (from educational pursuits to artistic talent) and to team-up in a supportive environment during times of illness or personal difficulties.

Choices for people's professional and also economic growth are placed within this approach, with a commitment to the individual and co-responsibility towards the agency, which is also expressed, for our most senior leadership, in a new business incentive system. Over the years, our commitment to building shared leadership aims to transform this corporate culture into a governance model and to embed these values into the DNA of the agency.

PH: What is your strategy for integration? Will SEC Newgate operate as a family of brands, will you look for opportunities to cross-sell, or do you expect the firms you’re buying to come together under a unified brand at some point?

PH: Today, with some exceptions related to recent acquisitions, we already operate under the unified brand of SEC Newgate. We will complete the process at the appropriate time, taking into account the weight of the identity of each Company in its respective market. This integration is well underway in terms of cultural exchange, sense of belonging, commercial activities and also through the establishment of common tools across the group.

Meanwhile our cross-selling is growing significantly: in terms of opportunity as of March 15th this year compared to the full month of March 2023 we saw an increase by 105%.

PH: What are the areas of investment that you think are crucial for an agency business to invest in as societal and technological changes shift the future of the business?

FT: The crucial investment lies in our people. While the technological environment is fundamental, it will change rapidly and it is important to have people that can help to accurately understand real changes, avoiding mistakes, as much as possible, and discern which technologies can really enhance our service for clients. This without forgetting that our job relies on three fundamental assets: content, relationships, and context. Technology should serve as a facilitator for our people to better manage these three assets on behalf of our clients.

PH. Is this a long-term agency-building project, or do you anticipate reaching a certain size and scale and then shifting from buyer to seller?

FT: My dream is to move what began as a small Italian business into a competitive worldwide group with strong European roots within the top ten of the market. Then it will be time for a new stage of our history. As Aristotle said: “He who sees things grow from the beginning will have the best view of them.”