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Today’s announcement that the Paris-based Publicis Group is buying the Boston-based interactive services agency Sapient is a sign that the giants are suiting up for the next era of interactive advertising and marketing.
Publicis announced it is putting down $3.7 billion in cash for the nearly 25-year-old Sapient. A new platform — called Publicis.Sapient — will seek to converge marketing, omni-channel commerce, consulting, and technology, and better position the new company for the booming digital world.
Together, the two companies say they will have a combined global workforce of more than 75,000, with an annual revenue of nearly $13 billion.
“Publicis had already positioned itself as an expert of digital things,” Endpoint Technologies Associates analyst Roger Kay told VentureBeat, noting that the company’s “mission statement sounds like what Sapient does.”
Publicis already owned the digital agencies Digitas and Razorfish, as well as Leo Burnett and Saatchi & Saatchi. Before today’s announcement, Sapient had been the largest remaining independent agency of its kind.
Kay pointed out that Sapient was a “digital-first company [that] had street cred in technology,” infrastructure, marketing, and that it acquired its first advertising bona fides by buying Nitro in 2009 — although Nitro’s fit into the Sapient culture has reportedly not been without friction. Over the last few years, Sapient has similarly acquired several other small ad shops.
“This is the biggest and most significant move that Publicis has made in an effort to shore up [its] digital offering,” Forrester principal analyst Sarah Sikowitz told us, “including the merging of Rosetta and Razorfish and the purchase of [programmatic ad platform] Run.” The newly formed Razorfish Global is apparently not going to be Publicis’ digital anchor, she said, contrary to some speculation.
In May, a $35-billion deal to merge the third-largest ad firm Publicis with the second-largest American ad agency Omnicom fell apart. If it had been successful, it would have replaced the London-based WPP as the world’s biggest agency. Publicis chief executive Maurice Lévy and Omnicom Group head John Wren admitted to The New York Times that a key goal was to outsize WPP.
Lévy also said at the time that his company would boost its efforts to compete with the giants in interactive advertising, including Google, Yahoo, and Facebook. Size and a wider range of clients and technology means that the new Publicis might have more leverage as digital ads and marketing continue to boom.
Lévy has also said that the Sapient deal will move up by three years Publicis’ goal of getting half of its revenue from digital, from its current 40 percent.
The deal, which requires regulatory approvals in the U.S. and Europe, is scheduled to close by March 31.
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