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Marketing Tech News asked Daniel Domberger for his thoughts on the growing trend for digital marketing businesses to accelerate their growth by acquisition.
The digital marketing space has gone through huge transformation in recent years as evolving social trends and technological developments change the way that people consume marketing messages. This makes it imperative for marketing agencies and providers to adapt to this changing environment in order to target and engage their key audiences.
There is a growing trend for digital marketing businesses using acquisitions to accelerate their growth, drive change within their own organisations, and increase their presence and competitive capability set. Their motives are simple: a business that can gain real-time insight and a clear view of the target customer has a distinct competitive edge, but requires detailed data, insight and analytics to do so.
A history of acquiring key strengths
The acquisition of Merkle by Dentsu Aegis earlier this month is the latest and largest example of this trend.
This need to grow and to remain competitive against the bigger players has spurred Merkle to complete 10 acquisitions in the last five years. One of Merkle's recent high profile acquisitions saw the company acquire Comet Global Consulting. In completing this deal, Merkle set out to strengthen the technology underpinning its data-led marketing model.
Dentsu has done the same, using acquisitions to drive international growth, buying ten other companies in this year to date alone. One of these saw the Japanese-owned media company acquire India-based Fountainhead Entertainment with the aim of linking capabilities to create the largest brand activation marketing agency in India. In striving to achieve consolidation, it paid a premium to acquire core expertise and data-led capabilities to spur growth in this region.
New insights, new opportunities?
Both Dentsu and Merkle have struggled fully to integrate some of their acquisitions, and to cross-sell effectively between the various businesses that they have acquired over the years. A willingness to make highly-valued acquisitions needs to go hand in hand with a clear strategy for capturing the benefit they bring.
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