– BY VIJAY VERGHIS
Design studios have always been the niche set up within agencies & media business, however, that is a thing of the past. With companies like Accenture, Cognizant, IBM, Deloitte & Wipro who are on an aggressive acquisition spree has led to disruption in this space. Some of the major acquisitions in this space over the last 2 years have been led by technology and consulting firms.
Fact Check – these acquisitions always gets me thinking
- Whether these are a smart marketing strategy for these billion dollar brands whose primary business model is around technology & consulting to identify new business models
- Easier and smarter to sway to build capabilities which are niche and difficult to build in scale
- Find increment revenue models by swaying into a new business or get access to the marketing organizations
- To sway large technology business towards their side using these acquisitions as a value proposition.
- Have any of them really managed to onboard or retain the culture or the core dan
Matter of fact most of them are buying agencies who are normally closing small deals so why make these huge spends. Does it really help in improving their top or bottom line? In a few years, the dust will settle and you really get to see the ROI on them. At least in all their earning calls, they all are consistently singing the same song how wonderful and strategic these acquisitions are.
So let’s look at why these acquisitions are needed?
Marketing and big business are getting agile and digital models expect business to be more flexible. Many of these big organizations ability to restructure to quickly or adapt and bring in new skills are found wanting. Spending millions on skilling and re-engineering in-house skills definitely will not fit your current business model. So finding a nimble niche agency which is specialized will help solve this problem.
What are these problems that can be solved with these acquisitions?
- Get agile
- Get cheaper
- Smarter and young energetic workforce are who always supercharged
- Precise focus on niche skills and cutting-edge technologies
What Positives do brands leverage from these acquisitions?
- Negotiate terms with the large agency players to get into an outcome-based model rather than a premium priced models.
- Get out of the retainer pricing models and get into outcome driven models.
- Encourage decoupling of strategy, creative and production separately.
- Focus on agility
- Reward creativity based on sales and not on how interactive the idea and tie it to an ROI.
Technology firms under its new avatar “digital” will challenge many of the design and media conglomerates. Battle lines are drawn with these media giants making tech acquisitions. With self-proclaimed pundits and analysts all talking about the end of the IT golden era. No one really seems to have a clear solution. Definitely, this industry is in the mode to be uberized by startups which are challenging the big service providers. While many still figuring out their strategy or finding their way through this mess. There are clearly a few leaders emerging.
Be cheerful that as an entrepreneur you can always make a quick buck thanks to the big companies and their acquisition spree. So focus on building good IPs, and small boutique agencies with a focus that one day you sell them to these biggies. Raise ur evaluation with a niche client base and decent revenue top line and focus on building value more than scale.
Some major acquisitions over the years
Time will tell how this is going to shape.
P.S views expressed are individual and not focused on any company or individuals.
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- 58He holds movies and football over all else, with the possibility of his Mac. A Digital Marketing Consultant, Unmesh has a degree in Computer Engineering and savours the technology fuelled environment of a digital marketing hub, because marketing has always been his first and truest love. He completed his post-grad…
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- 44Vijay is a Digital Marketing & Design consultant with over 14 years of global industry experience in account management and consulting. He has senior management experience across multiple industries and is expert at developing and executing integrated digital marketing strategies that result in higher revenues, stronger customer loyalty and deeper…