Carlson Expands in Europe and Asia

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The Carlson Marketing Group last month purchased Performance Nordic in Norway and Direct International in Singapore and said it plans to acquire two other Asian companies -- one in Korea, the other in Indonesia -- before the end of May.


It would not name the other companies it plans to acquire.


"We've worked with Performance Nordic for a dozen years and worked with them so well that we approached them about an equity sale and they were interested," said Robert Janes, president of Europe and Asia Pacific at Carlson. "This is our first owned position in Scandinavia, though we have been active there through partnership arrangements for some time."


Carlson, based in Minneapolis, also owns offices in London, Brussels and Amsterdam.


Performance will serve as a hub for the parent company's Scandinavian operations, covering Sweden and Denmark as well as Norway. It has specialized in customer loyalty, channel and employee marketing and graphic design. Clients include Canon, Audi and Sony.


Janes said Carlson has a European and Asian network in the sense that "we offer a combination of owned and associated companies in Europe and Asia. We judge when the opportunity is right to move from partner to owner."


Surprisingly, Janes does not consider Germany a good fit for ownership, though Carlson is represented in that market through associates.


"We are a marketing business, and German legislation surrounding direct marketing and sales promotion is very restrictive," he said.


Though Germany is Europe's biggest market, he said it was "modest" for marketing service businesses.


"We have been active in Germany for many years and have even owned businesses there, but it has never proved to be a particularly profitable market for us," he said. "Unless you have been there a long time, it is hard to establish a profitable position.


"France is curious," Janes added. "The country has a strong marketing services industry, but it has been difficult for non-French companies to establish much of a foothold. We've worked with IPC, a long-established DM and promotional group, for 20 years but never found the right ownership opportunity."


Janes considers acquisition of Direct International in Singapore "quite important for us. We've been in [Asia Pacific] for 20 years, but mostly in Australia and New Zealand and in Singapore for five years. But our Singapore operation was to support clients like British Airways and Cisco in development of their loyalty programs. Now we expect to develop our own client base. We have 40 people in Singapore."


One problem about doing business in Asia Pacific, Janes said, is that most business is advertising-led, though that is changing.


"We are working with major players like airlines, petrochemicals and financial services," he said. "Through this acquisition we are now working with Motorola, Apple and a range of hi-tech clients, and we are actively pursuing new business leads. We expect substantial growth there."


Korea is a solid area for acquisition, Janes said, as is Indonesia, despite the political and economic turmoil shaking that region.


In addition, Indonesia is only an hour's flight from Singapore, so Carlson can support the Indonesian acquisition from its new Singapore base.


The most important target in Asia Pacific, Janes said, is channel marketing -- supporting distributors and resellers and persuading them through various loyalty programs to feature client products and not the competition.


While Carlson remains what Janes called a "U.S.-centric company," he noted that 25 percent of revenue now comes from overseas, with most of the growth coming from outside the United States.


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