Merkle CEO David Williams On Holding Company Integration And Evolution

david williamsIf Dentsu Aegis Network’s majority investment in Merkle goes through, the CRM and performance marketing agency will support Dentsu’s media-buying agencies.

Those media agencies will gain access to Merkle’s proprietary tools, including a cross-device identity management system, a CRM-matching database for publishers and, most notably, the M1 audience platform.

“The intent is that every agency within the Dentsu Network that does media planning will tap into M1 as the data that fuels it,” said John Lee, EVP and chief strategy officer at Merkle.

Consequently, Merkle won’t be fully integrated into Dentsu.

“There is no place to really integrate Merkle because [Dentsu] doesn’t have the type of capabilities Merkle has,” said David Williams, CEO and chairman of Merkle. “Fundamentally we’re a different kind of business. We have a massive data center, manage and host tons of marketing tech platforms and have a strong integration capability that most agencies don’t possess.” 

Without complete integration, it might be difficult for Dentsu to extract all the value from Merkle’s business, pointed out Andrew Frawley, CEO of data marketing agency Epsilon, a competitor to Merkle.

“The question will be more about how they operationalize it,” he added.

Williams agreed that it will take “time and blending” for Merkle to successfully collaborate with other agencies in the Dentsu network. Merkle will retain its clients that have relationships with competing holding companies, and Dentsu and Merkle will work together on shared clients when it makes sense, Williams said.

Ultimately, Williams hopes Merkle will help Dentsu evolve.

“The next frontier is in the data and technology area to support highly targeted, measurable, customized experiences,” he said.

Merkle is Dentsu’s biggest, but not its only, performance marketing acquisition. The holding company acquired digital analytics shop Cardinal Path in March and B2B creative agency Gyro in July. With Merkle, Dentsu differentiates itself from holding companies that have also sought to distinguish their abilities through acquisition.

WPP put its focus on programmatic when it acquired digital agency Essence and invested a minority stake in DSP AppNexus, as well as measurement when it bought shares in TV measurement company Rentrak. Publicis Groupe’s acquisition and subsequent reorganization around Sapient put digital consulting at the core of its services.

“It definitely is an evolution,” said Forrester analyst Sarah Sikowitz. “[Holding companies] want to be able to provide more of the services demanded by their marketing clients.”

It’s a challenge Dentsu isn’t alone in facing: delivering a fully integrated approach to clients, especially when it’s something management consultancies and technology companies are increasingly able to offer.

But for companies looking to acquire in the CRM area, it’s slim pickings, Williams said.

“I think the interesting question is, who would they acquire?” he said. “I’ve been in this industry for 25 years and I couldn’t name two options. We were the largest independent player in the marketplace.”

 

Add a comment

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>