15th October 2013
UK advertising giants such as WPP should spin off their internet advertising businesses to create separate world beating companies says Walter Price, manager of the £120m RCM Technology Trust.
The technology specialist, whose trust is biased towards mid cap global technology stocks, says the UK is a beneficiary of the global technology shake up that is helping small businesses run and advertise more effectively writes John Lappin.
The trust invests a relatively small proportion in the UK at around 2.3 per cent of the portfolio. But when asked how that might change, Price said one way he might increase that percentage is if he could invest in a pure internet advertising play from the UK.
He says: “There is a huge opportunity in helping small business to monetise and basically run their business better and do advertising work with firms like Facebook. My advice would be for advertising businesses to split off and take public their internet agencies. Advertising is very strong in the UK with great agencies that are very powerful, but there is no pure play in this category, one that is growing very fast at 50% a year.”
“It is an international strength that the UK. So rather than being a part of, say, WPP it could grow a lot faster independently, rather than being part of a larger company. I would encourage these new operations. They could be global leaders in a category the UK is very good at.
“Don’t keep it inside a big company that grows moderately but encourage these businesses o spin off and grow a lot faster. It might become even more valuable than the company it spun off from in the first place.”