You’d be forgiven if you read about Publicis Groupe SA’s $3.7 billion deal to acquire Sapient and wondered, isn’t that a digital agency? Don’t they own lots of those already? And, is any agency really worth $3.7 billion?
Well, for starters, let’s look at what Sapient is and isn’t.
The company consists of three pieces. There’s SapientNitro, the digital agency and marketing consulting unit, the business that Publicis is most interested in getting its hands on.
There’s also Sapient Global Markets, which provides technology and analytics for people in the capital and commodity markets, and Sapient Goverment Services, which provides tech and services to entities like the Marines and the Library of Congress.
The SapientNitro business has been actively trying to position itself as a next-generation agency–one that can create and buy digital ads (much like DigitiasLBi or Razorfish), but also offer marketers a range of technology and services that are more along the lines of what consulting firms like Deloitte and Accenture do. That has Publicis opening up its checkbook.
Sapient’s pitch is that it can be a one-stop shop for a brand — designing its website, buying ads to drive traffic there, and also building and managing its e-commerce functionality. The agency might also design such a brand’s mobile apps and even help influence the design of its stores.
Plus, SapientNitro says, it has the technology and expertise to make sure that all the back-end systems talk to each other, so that Marks and Spencer (a Sapient client) knows that a person who visits its mobile app has recently purchased outerwear and lives in a particular region, for example.
“We are actually the people who build the site and the systems integration that pull all tech together to make it work,” said Alan Herrick, Sapient’s President and CEO.
That’s markedly different from what a classic agency is tasked with.
“Their core is not making or buying digital ads, it’s about helping marketers transform their business to go digital,” said Jay Sampson, vice president of global partner sales at Adobe, which works frequently with SapientNitro. “The real play here is not ad creation or buying, it’s managing a marketer’s full experience.”
“If you think about a consumer, they now have all these touchpoints with marketers,” Mr. Sampson added. “So all of the data they generate needs to be tied together, and brand content they consume needs to look and feel the same. Those experiences have to tie into one overall experience. That’s really where the agency of future has to play.”
Sarah Sikowitz, principal analyst at Forrester, said SapientNitro has spent the last 18 months setting itself up for that future through a series of acquisitions. It nabbed the market research firm Iota Partners, which is working on helping marketers collect data from everyday objects via digital sensors (the whole Internet of Things trend). The company has also acquired Second Story, which specializes in digital in-store experiences, as well as the social creative shop Campfire and (m)phasize, which promises to help marketers allocate media budgets.
“They’ve been trying to create more holistic offerings for brands, and they are known for[their ability to handle] large scale implementation,” Ms. Sikowitz said. “They’ve done a really good job of [building a] consulting firm and agency.”
Meanwhile, when it comes to digital, “Publicis has been scrambling,” said Ms. Sikowitz. “As they are trying to make sense of their assets, this gives them a really strong offering. It’s a really smart move.”
A move worth $3.7 billion and a 44% premium? That’s open for debate.
Mr. Herrick sees Sapient–and all digital agencies, for that matter–fighting for the same marketing budgets as consulting firms going forward. That is why Sapient is attractive to Publicis, he believes.
“This is all driven by consumers’ changing habits,” he said. “We are building a deep consulting business with our industry base. And Publicis wants to expand that.”
Source: http://blogs.wsj.com/cmo/2014/11/03/what-is-sapient-exactly-and-why-is-publicis-spending-3-7-billion-on-it/
- Brent Lewin
The company consists of three pieces. There’s SapientNitro, the digital agency and marketing consulting unit, the business that Publicis is most interested in getting its hands on.
There’s also Sapient Global Markets, which provides technology and analytics for people in the capital and commodity markets, and Sapient Goverment Services, which provides tech and services to entities like the Marines and the Library of Congress.
The SapientNitro business has been actively trying to position itself as a next-generation agency–one that can create and buy digital ads (much like DigitiasLBi or Razorfish), but also offer marketers a range of technology and services that are more along the lines of what consulting firms like Deloitte and Accenture do. That has Publicis opening up its checkbook.
Sapient’s pitch is that it can be a one-stop shop for a brand — designing its website, buying ads to drive traffic there, and also building and managing its e-commerce functionality. The agency might also design such a brand’s mobile apps and even help influence the design of its stores.
Plus, SapientNitro says, it has the technology and expertise to make sure that all the back-end systems talk to each other, so that Marks and Spencer (a Sapient client) knows that a person who visits its mobile app has recently purchased outerwear and lives in a particular region, for example.
“We are actually the people who build the site and the systems integration that pull all tech together to make it work,” said Alan Herrick, Sapient’s President and CEO.
That’s markedly different from what a classic agency is tasked with.
“Their core is not making or buying digital ads, it’s about helping marketers transform their business to go digital,” said Jay Sampson, vice president of global partner sales at Adobe, which works frequently with SapientNitro. “The real play here is not ad creation or buying, it’s managing a marketer’s full experience.”
“If you think about a consumer, they now have all these touchpoints with marketers,” Mr. Sampson added. “So all of the data they generate needs to be tied together, and brand content they consume needs to look and feel the same. Those experiences have to tie into one overall experience. That’s really where the agency of future has to play.”
Sarah Sikowitz, principal analyst at Forrester, said SapientNitro has spent the last 18 months setting itself up for that future through a series of acquisitions. It nabbed the market research firm Iota Partners, which is working on helping marketers collect data from everyday objects via digital sensors (the whole Internet of Things trend). The company has also acquired Second Story, which specializes in digital in-store experiences, as well as the social creative shop Campfire and (m)phasize, which promises to help marketers allocate media budgets.
“They’ve been trying to create more holistic offerings for brands, and they are known for[their ability to handle] large scale implementation,” Ms. Sikowitz said. “They’ve done a really good job of [building a] consulting firm and agency.”
Meanwhile, when it comes to digital, “Publicis has been scrambling,” said Ms. Sikowitz. “As they are trying to make sense of their assets, this gives them a really strong offering. It’s a really smart move.”
A move worth $3.7 billion and a 44% premium? That’s open for debate.
Mr. Herrick sees Sapient–and all digital agencies, for that matter–fighting for the same marketing budgets as consulting firms going forward. That is why Sapient is attractive to Publicis, he believes.
“This is all driven by consumers’ changing habits,” he said. “We are building a deep consulting business with our industry base. And Publicis wants to expand that.”
Source: http://blogs.wsj.com/cmo/2014/11/03/what-is-sapient-exactly-and-why-is-publicis-spending-3-7-billion-on-it/