After decades of specializing in hardware and on-premise servers, IBM is emphasizing its new-wave agency IBM Interactive Experience (IBM iX), a mashup of design, systems integration, analytics and the Internet of Things, with billings in the billions.
IBM iX made three digital, design and brand agency acquisitions in a single week this winter when it snapped up Resource/Ammirati, Ecx.io and Aperto.
Then it paid about $200 million for digital consultancy and Salesforce specialist Bluewolf.
Many industry insiders wondered why IBM would acquire a competitor’s key consulting partner.
But, as was evident at IBM’s big marketing and commerce confab Amplify in Tampa last week, this ain’t your daddy’s IBM anymore.
“As much as we’d like you to use IBM for everything, we realize that’s not practical,” said Steve Mello, a VP for IBM Commerce.
IBM heralded interoperability, particularly related to its marketing applications and agency services businesses.
“We want to be able to connect into any operational system at scale,” Kevin Bishop, VP of customer engagement solutions for IBM, told AdExchanger. “Just because you bought one module, it doesn’t mean you’ll take it all. We’re very interested in tools that allow you to use other tools, no matter the data source.”
The ‘Consulting Agency’ Model
Bluewolf gives IBM iX a stake in non-IBM deployments.
Besides being a big Salesforce partner, Bluewolf also manages deployments from vendors including Marketo and Oracle, said Corinne Sklar, global CMO and managing director of the marketing services practice for Bluewolf.
While Bluewolf has CRM and mar tech systems integration expertise, IBM iX brings depth in UI/UX design and experience, cognitive analytics and mobile experience – skill sets Sklar sees as complementary.
“Most traditional agencies are coming at this from a creative or media standpoint but they don’t get how business gets executed at the corporate level,” Sklar said. “You can make tools do anything these days, but we’re looking at business plans and strategy, with deep experience in data and BI behind it. We call ourselves a consulting agency.”
Unlike other systems integrators/consultancies acting as sales channels for large enterprise stacks, Sklar said Bluewolf takes a different approach.
“Our clients are paying the bills, so I feel like I’m a voice for the customer,” Sklar said. “I don’t think things like agency retainers or billable hours will go away in the short term, but we’re definitely looking more at business outcomes.”
IBM iX and Bluewolf say their hybrid agency model can benefit from macro forces impacting the larger agency community.
Factors like downward pressure on agency fees could indicate future marketing org cost-cutting. By offering both tech and agency services, IBM feels it’s immune from the broader belt-tightening in the media agency space.
More marketing organizations are aligning their projects with larger business objectives, IBM’s Bishop suggests, so C-suite executives like CEOs and CFOs are now brought to the table for CRM, analytics or data management platform selections.
The C-suite is thinking about “through-life engagement,” what Bishop describes as an emphasis on customer lifetime value (retention and loyalty) versus pure acquisition or campaign-based approaches.
“If you’re in a domain that’s losing money, it can feel like costs are being cut, but people are moving budgets to places that drive returns,” Bishop said. “I see elimination of waste as a driver, but it’s a different motivation than taking costs out. It’s, ‘I want to drive better outcomes.’ It’s driven by the ability to provide better service.”
