by Scott Denne
Omnicom comes out of hibernation with its reach for customer experience consultancy Credera Technologies. Today’s announcement marks the ad agency holding company’s first tech deal in almost three years. The purchase comes amid a series of stinging earnings reports by Omnicom and its peers as they struggle to keep up with the evolving needs of marketers – needs that have helped large consulting shops gain ground in Omnicom’s market.
Credera brings to Omnicom a set of consulting services that encompass management consulting, user experience, product development and other disciplines that help businesses deploy digital technology for customer engagement. While it’s common for ad agencies to own firms that specialize in digital commerce, web development and other specialties that are closely linked to marketing, they don’t often acquire service providers that help clients make changes to the business itself. That Omnicom has done so speaks to the current struggles of ad agencies and the new types of competitors they face.
Omnicom lost more than 10% of its value after reporting just 2% organic revenue growth, with a decline in its North American advertising business dragging down results. (It wasn’t alone: a few days afterward, WPP disappointed investors with its first-half report.) With the growth of data-driven digital advertising, ad agencies face clients that now want to roll advertising into a larger digital transformation strategy.
The capabilities needed to pull off those projects – change management, software buying and data integration – are often beyond an ad agency’s expertise. That has helped Deloitte, Accenture and other consulting shops with technology chops to take a chunk of the agency market over the past few years. In our surveys, we see those types of digital transformation projects accelerating. In 451 Research’s VoCUL: Corporate Mobility and Digital Transformation Survey at the end of last year, 40% of respondents told us their company has a formal digital transformation strategy, up from 30% in the first half of the year.
