5 September 2008 - 9:57am| by | 0 comments

Giggin' in the Riggin' - The Changing Fortunes of AVC

Life on a North Sea oil rig in the mid-70s was pretty dull. That is until AVC started supplying video recorders and mobile discos to brighten things up. Now, steered by Spencer Buchan, the business is looking to crack the £50m mark in the next five years

Giggin' in the Riggin' - The Changing Fortunes of AVCGiggin' in the Riggin' - The Changing Fortunes of AVC
The main man Keith Main who started AVC 32 years ago.
Spencer Buchan, who is now taking the reigns at one of Aberdeen's most interesting media companies.

In the early 80s Main expanded to supply video recorders to the oil workers before branching into the supply of blockbuster movies. Around 10 years ago, Main agreed a deal with Sky – which had an eye on the lucrative offshore industry in the area – to supply the whole of the North Sea with Sky’s products, providing every yacht, shipping vessel and oil rig with digital entertainment through AVC. The company quickly became profitable.

But it is in more recent years still that AVC has expanded its creative and marketing offering. This started with the acquisition of rival media agency Precision Media in 2006, followed shortly by the acquisition of local PR and advertising agencies (PR Partnership and Brand Advertising), satellite company RDS and, most recently, web development company Creatus, in June this year.

AVC currently enjoys an annual turnover upwards of £12m and currently employs 93 staff across its various disciplines. The company is also close to completing a £3m extension to its offices in the outskirts of Aberdeen.

Thriving
That a media operation is thriving in the north of Scotland will come as a surprise to many rival agencies and production firms across the UK who may never even have heard of this northerly media outpost.

After 32 years, Main is now more hands-off, passing on the every day running to a management team fronted by director Spencer Buchan. Buchan has been at AVC for four years now, having joined from scientific, engineering and technology company, SAIC, where he was European marketing manager, and he has overseen the acquisition drive by the company in that time.

“It’s been a conscious effort on Keith’s part to add a more dynamic approach,” begins Buchan, admitting openly that the growth of the company is primarily about making money.

“When I joined the company there were many opportunities that we were missing out on. With Keith’s blessing as the banker, we set about a strategy to grow the business through organic areas but also through acquisition.

“We realised that the companies we were working with all invested heavily in advertising, PR and media production. So we made a concerted effort to push into those areas. We had to decide whether to employ the appropriate skillsets – which aren’t always readily available in Aberdeen, or go out and acquire existing businesses.”

The acquisitions were not isolated investments, though. AVC has nurtured its existing business implementing a system of training, development and succession planning to help fuel organic growth alongside the acquisitions.

The company’s profile was heightened further this year when it announced that it had agreed to become Al Jazeera’s communications and media training company, training the Middle Eastern channel’s correspondents, an agreement which saw Buchan travel to Qatar’s capital city Doha to look at the set up and meet the organisation’s key representatives.

Alongside Al Jazeera, AVC also works extensively for Fifa and Uefa – on both broadcasting and multimedia production – two clients alone for who most MDs would happily perform self surgery to have on their books.

So why is this not work that the company actually promotes?

Beckham
“If you say that you’ve worked with David Beckham you’re going to be told you’re a liar,” Buchan explains. “We’ve worked with Man United, Chelsea, Celtic and Rangers. We worked with a number of English Premiership clubs looking at IT solutions. It’s all through relationships that we’ve created. When they’re at the tournaments or conferences one manager will ask another manager ‘do you know anyone who can do this?’ No amount of advertising or promotion is going to beat that.”

While the turnover is growing towards £13m, the profit has also increased, claims Buchan.

“We all want to make money out of it,” he adds and hints that the firm has looked into the future acquisition of a London company.”

However, he urges caution and admits that buying a company so far from base is not something he is sure would work.

“Do we want to jeopardise our profit by taking key staff and putting them into something at the other end of the country? It could have a negative effect on the core business. That’s the big problem. I don’t believe you can acquire something and work it from afar. You need to put a team of people in there who understand the agency’s culture.

Usually an acquisition is an approach for a company that isn’t working – something is broken somewhere and therefore you’ve got to fix it. It takes time and energy and can be distracting.”

Yet such a move wouldn’t be the first time that AVC would have had a presence in the UK’s capital, having once launched a London production company, Mainstream Productions, which produced music promos.

According to Buchan that foray failed for the very reasons that makes him wary of another venture in the captial – it was too much to oversee from too far away.

Buchan admits that although being based in Aberdeen has no doubt helped the company grow, especially from its roots in the oil and gas sector, being so far from the main cities has hindered the company in terms of recruitment and building its client list.
Despite this, he says, AVC has no interest in ever moving into the Scottish central belt to take on the agencies in Scotland’s creative heartlands of Edinburgh and Glasgow.

“Do we want to grow and compete with the central belt?” he asks rhetorically, “We have the ability. But if you’re dealing with a central belt-based company, and they have the option of dozens of local agencies, are they really going to take on the extra expense of a company in Aberdeen with the travelling and all the other expenses, probably the answer is ‘no’.”

Far East
In fact, perhaps unsurprisingly, Buchan says that if the agency does grow outside of Aberdeen again, it is most likely to look to the Far East. And it would not be the first Aberdeen company to do so, with Fifth Ring having successfully launched an office in Dubai four years ago.

There is an affinity between Aberdeen and Dubai, one built on power and the love of black gold.

“Oil and gas is an obvious niche for us. Many of our staff come from families who live and work in that environment, so they understand the sector. It’s great to establish a specialist niche sector without having to conquer someone else.

“It makes sense for us to look at the Middle East. It’s just about when and how we do it.”

Still gazing into his crystal ball, Buchan cites the company’s five year business plan, claiming that a future MBO may be on the cards. But, until then, he adds “whatever the future holds, in terms of how media changes, we’ll be there or there abouts, but we’ll do it for the right reasons. We won’t just do it for the sake of it, we’re not sitting about on beanbags trying to look creative. We do things because the client wants us to. And I don’t see why this couldn’t be a £50m turnover business within the next five years.”

Not bad for a media firm that started off life punting videos to needy offshore workers in the north east of Scotland. 

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