Latitude goes into administration wow
First off if you think this is going to be a gloating post you are wrong, I have great respect for 2 of the larger SEO companies in the UK. Latitude who I worked along side many years ago for a banking client, and Big Mouth Media ( Andrew quick fire the email off around the office that I’m going to say something nice). I haven’t worked with BMM but I do know Andrew Girdwood quite well and often chatted SEO with him.
What I like about them is how different they are to Bronco, my SEO agency. We don’t have sales people or account managers here or the structure like BMM. I still think we are an awesome SEO company and we will all kick arse in the playground at lunchtime, but we are less than 10 SEO staff handling less than 20 SEO clients. Companies like BMM and Latitude in my eyes are like large SEO Armies, we are more like Special OPs (seops), that’s not to say that BMM and Latitude don’t have their own inhouse seops they do, its just they tend to be kept locked away behind a paywall of account managers.
So it did come as a little surprise to me when I read this story in the telegraph about the 5 million pounds in loans that are supposed to be getting written off by Barclays, lets keep our fingers crossed that our friends jobs at latitude will be safe. One thing though that I find it hard to work out is how the top level of execs at Latitude can sleep at night knowing that the company is in so much debt, as having good cash flow and cash reserves is the life blood of a company which we have always managed to maintain.
Dave
16 Comments
Garry Davis - http://www.whycommunicate.co.uk
Hi Dave
It appears that a MBO is going to save the day and jobs as well.
http://www.thedrum.co.uk/news/2010/01/12/12394-management-takes-control-at-latitude-after-administration
Agree with you on the cash flow piece. These organisations are ‘betting’ with the banks money that they can provide a return. I don’t think i would sleep well.
Garry
Richard Gregory - http://www.latitudegroup.com
Hi Dave
It’s business as usual here at Latitude following the MBO. All the jobs are safe and we’re still recruiting.
Our take on the story is here – http://www.latitudegroup.com/blog/latitude-completes-deal-to-accelerate-growth/
Happy to share details over a pint at SES
Richard
richardbaxterseo - http://www.seogadget.co.uk
Yeah it’s never good when a major agency experiences problems. I imagine this could affect client confidence in sourcing new agencies for a few months to come.
Andy Betts - http://www.bettzi.com
Great post Dave,
Couldn’t agree more with your sentiments on Latitude and BMM.
There is a harsh reality, that many big search companies faces (specialist and full service) – the rise of boutiqyue agenices with specific domains of specialism. – http://bettzi.com/2010/01/08/search-marketing-reality-for-ceos/
However, people tend to forget that we have peers in this industry that should always be respected. There is no need, or real case for people to gloat. People have families and careers to think about. Latitude will do just fine, they have some great people there and I don’t see this being a problem for them in 2010. It’s not nice, but as you mentioned, cash is king.
Mr Gregory is one of the most talented people in SEM I know and I’m sure they will pull through. The market is big enough for large SEM’s and smaller/boutique agencies. I just don’t think we saw the consolidation n to ‘one stop shops’ as predicted.
regs
Andy
UK SEO Company Goes Bust - pingback
[…] I first heard about Lattitude having problems from Dave Naylor’s blog […]
Lord Manley - http://twitter.com?status=@LordManley
I have a lot of respect for Latitude’s work and it is never good for the industry when an agency goes West. If nothing else, it makes for more complicated RFIs
Garry Davis - http://www.whycommunicate.co.uk
Latest news can be found at:
http://www.nma.co.uk/news/latitude-moves-out-of-administration-after-second-buyout/3008511.article
Fionn Downhill - http://www.elixirinteractive.com
I work in the US but had the pleasure of working with Richard Gregory in my role as a SMPO board member and founder of the SEMPO institute. He was a great guy very knowledgeable and extremely professional in all that we did together. So I am glad to hear they have survived. Dave I also take my hat off to these companies that can grow like this too. iCrossing, here in the US and companies like Latitude in the UK. I have gone down the road about 3 times now. Last year we really took the plunge to change from an SEO company to an agency and to say it was painful is an understatment. We pulled back just in time or we would not be here today. The economy did not help but the shear scope of full service, is overwhelming and to be honest I hated it. We are back to being an SEO company again and life is good, money in the bank and the profits are there again. I really do understand how you could get into serious problems unless you get VC money of course and that comes with a whole list of other issues.
Becky - http://www.beckynaylor.co.uk
We obviously can only speculate over the facts but I reckon Latitude going bust would have had a lot to do with the PPC side of the business … not only the recession that caused lots of people to cut their massive PPC spends quickly, but also I bet the withdrawl of the Google kickback on PPC spend didn’t help them. Their revenues will have been so much greater on the PPC side of the business to SEO.
Again I’ll reiterate what Dave said that I just don’t know how people can sleep at night with such a weight of debt riding over them, but I also don’t understand how or why Barclays can just write off so much cash.
Amelia Vargo
It’s always disheartening to hear of other businesses failing, or having difficulties – even when they are your competition. I’m pleased to hear that jobs are safe though.
Chris Peterson
Sometime it happens when big company face problem and unable to solve the problem.
Simon Turner - http://simonjturner.co.uk
It was interesting to see latitude announced it as a ‘Deal to accelerate growth’… talk about a positive spin! Great news that all the jobs appear to be safe at least.
joe - http://bbdo.info
Yeah it’s never good when a major agency experiences problems. I imagine this could affect client confidence in sourcing new agencies for a few months to come.
Miagi
This topic riles me.
You’ve got lots of hard working smaller agencies such as yourselves in Bronco. You bootstrap everything yourselves, work hard and probably don’t have much debt.
Then you get the 100lb Gorilla coming along racking up millions of pounds worth of debt then reforming and walking away.
So after a track record of £5m+ of debt the same directors should NOT be able to setup in the same space, they’ve proved they are incompetent already and it’s simply not fair on those of us who work hard to make ends meet.
Amanda Davie - http://www.reformdigital.com
I agree with the last post from Miagi.
The Latitude news last week is exemplary of a Search industry that has attracted many entreprenuers and investors due to its huge overnight success. People who had 5 year plans to grow agency businesses quickly, then sell them off and exit, cash in hand. People not versed in running successful agency business models, nor in client servicing, nor, in some cases, passionate about their subject. The end result is that clients become dissatisfied quickly, contracts end, and commercial models have no longevity upon which businesses can develop long-term growth.
Incentives along the way, such as Google’s Best Practice Funding programme, have only made people more greedy. What we’re now seeing in the Search industry is a shake out. And the wind of change is definitely whistling in.
Sadly, there will be more search and digital agencies like Latitude who will falter in 2010. And I agree with everyone – there is no reason nor excuse for gloating. Instead, we must all watch and learn from their mistakes, if we are to ensure that the service industry in Search can continue to grow and to add value to brands and businesses.
If we don’t learn and change our charging and service models, more and more clients will take Search in-house, as they have done in the US market. Or, as is happening to an extent in the UK, clients will be duped into thinking that so-called technology companies can re-produce our craft in a more automated and cheaper fashion. Both trends are deeply worrying because they suggest that Search marketing services is increasingly being commoditised and undervalued.
Jason
It is a real shame for Latitude. I guess that the financial sector which they were once so prominent alongside the huge margins they made through “guarantee applications/leads” has come to an end.
Whilst they has vast expertise in the search arena the misleading thing is that the transparent “business as usual” message they are issuing. It only really reads as “we hit problems but look we are still here ready to take your money.”
I’d imagine they will get brought out eventually on the cheap and integrated into a ‘proper’ full service agency rather than playing catch-up. Dylan did a great move and got out of there when he did.