IBM’s purchase of three agencies in six days on behalf of its in-house agency Interactive Experience (iX) is uncharacteristic since iX hasn’t been acquisitive in its almost two-decade history.
The first purchase, last Thursday, was Resource/Ammirati, known for brand building. IBM then acquired digital agency Aperto on Tuesday and design agency Ecx.io on Wednesday; both are based in Germany. No terms were announced.
IBM’s agency buys, placed into a broader context, represent another stage in an evolution that’s been happening for quite some time: the conflation of marketing consultancies and agencies.
“I don’t think you can say [IBM’s] acquisitions are necessarily meaningful,” said Brian Wieser, senior analyst at Pivotal Research Group. “It doesn’t mean there’s a sea change in focus inside of IBM.”
IBM iX’s global leader, Paul Papas, emphasized that the three acquisitions basically extend iX’s already existing capabilities, focused around four key areas: strategy, creative and design, analytics and customer platforms.
Of the three acquisitions, Resource/Ammirati and Aperto are most similar as both are digital agencies focused on branding and design.
Ecx.io is a little different, as it has expertise working with commerce and content management platforms – notably SAP hybris (commerce) and Sitecore and Adobe (content management).
Papas expects Ecx.io’s expertise in these areas to enhance IBM iX’s existing relationships. For instance, it has a global partnership with Adobe dating back to last year. And hybris and Adobe also work closely together.
From a macro perspective, though, IBM’s massive size means these acquisitions are just a drop in the bucket.
“The bigger question isn’t what are they doing, but why not until now?” Weiser said.
He speculated that IBM iX’s sudden acquisitiveness indicates internal political shifts: Financial gatekeepers inside IBM have decided to loosen up the purse strings.
While IBM iX hasn’t been a big buyer, other marketing consultancies have, such as Accenture Interactive and the five-year-old Deloitte Digital. Accenture Interactive bought the Australian digital agency Reactive Media in late 2014, and the Brazilian digital agency AD.Dialeto in August 2015. It also has a design studio called Fjord
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And Deloitte Digital a few years ago seemed to be on a digital agency acquisition tear.
And a year and a half ago, Publicis Groupe plunked down $3.7 billion for Sapient. “Publicis buying Sapient was a wise thing,” Wieser said. “The consulting part of Sapient is meant to go more closely, head to head, with certain parts of IBM.”
IBM indicated that its spending spree wasn’t a reaction to all of this activity.
“We’ve been in the design space in iX, going back over 20 years,” Papas said. “Unlike some of the other firms we compete against, we have built a world-class capability from the ground up over many years, as opposed to reactions from other folks buying into this space.”
Papas emphasized that IBM has access to unique assets – notably the Watson technologies and data from The Weather Co., whose cloud-based data platform will underpin IBM’s data services and Watson’s Internet-of-Things offerings.
Ultimately, it’s the Weather Co. acquisition – which closed last Friday – that is most significant to IBM as a whole. Its location and weather data will touch multiple units within IBM, not just iX.
The three agencies IBM iX bought – Resource/Ammirati, Aperto and Ecx.io – will keep their names for now and will be fully integrated into IBM iX. Once the acquisitions close, IBM iX will have more than 30 “studios” within its studio network.
