Publicis Groupe’s acquisition of Sapient: some customer implications
Building further on Scott’s post about the market implications of the Sapient acquisition by Publicis Groupe, he is right – the Publicis Groupe’s proposed acquisition of Sapient is different, as will be the impact on its customers. Past agency meldings have translated into little more than a name and executive leadership change. After all, many of the smaller agencies that have been gobbled up by bigger parent companies was done with the intention of adding the boutique offering as a alternative to its already larger agency options, and so minimum impact on the customer was always in those plans. Publicis.Sapient is different according to Alan Herrick.
Herrick, chief executive of Sapient, to be chief executive of newly formed Publicis.Sapient sees this acquisition as “… an opportunity to share a wealth of new capabilities with our clients”. He went on to say “The Sapient team has been on a 24-year journey building a company with the objective of creating significant impact for our clients and the industries in which they operate.” Herrick will likely be looking to bring everyone, including clients, onto this journey which will undoubtly make an impact on all aspects of the business right down to the client execution level.
For clients this new direction and partnership could be seen as a good thing with positive impacts on many fronts including processes, resourcing, and shared cost savings. For others it will leave them with angst and questions wondering how this move will impact their account management, current initiatives, and future relationship.
On the plus side clients may see:
- Improved processes – Sapient is known for its standards in operating procedures and process. Many of the smaller agency groups could benefit, as would their clients, from adopting a more consistent and structure project approach.
- Access to a larger pool of resources for the best fit team – Adding Sapient’s 13,000 employees, of which approximately 65% are based in India will add bench global bench strength and technology expertise to draw from with global and 24/7 support and development options that may not have been previously available.
- New services and product offerings – Each company brings new strengths and capabilities to the table for each other’s existing customers. Together they offer clients a one-stop shop choice for all their digital, marketing, and technology needs.
- More innovation – More bodies means more brains, and more brains can lead to more creativity and innovation when it comes to an approach, solutions, and deliverables. When new people and teams come together great things can happen.
- Cost savings – It is simple economies of scale, the more you buy the better the price, and those reductions can translate into big savings for clients particularly when it comes to buying things like enterprise technology licenses. That assumes of course that the volume pricing is passed along to the client.
- Access to more subject matter expertise – As mentioned before, more people means more brains. Bringing Sapient’s 13,000 employees into the Publicis Groupe fold will naturally bring new skill sets and knowledge which is great for all involved. The challenge will be figuring out how to integrate this expertise to make is accessibly by all.
On the down side clients may also experience:
- Disruption to service and loss of focus/productivity particularly in the early stages of the acquisition – Acquisitions are never easy particularly at the outset when both sides of the new partnership are trying to figure out how things will function moving forward. People, particularly at the management level and functional areas (marketing, accounting, etc.), worry that they will be out of a job. This can impact service at the client level.
- Change in approach/philosophy – Acquisitions almost always bring a change of leadership, this case is no different. Publicis.Sapient’s new executive team will be looking to make their mark across all facets of their new organization. This could significantly impact client practices. Reading between the lines, the impact will likely be much higher for Publicis Groupe agencies’ existing clients than for Sapient’s.
- Loss of contacts and team members – Merging a matrix of companies, some of them sizable, will naturally lead to duplication of roles and redundancies in processes and systems. Synergizing these elements is an essential step in realizing the cost efficiencies, and therefore enhanced revenue and cost savings of the new business. But to clients whom have invested in building a relationship with their service provider team this could mean the loss of a long-time account executive who can anticipate their every need or the accounting service representative who understands and adheres to the company’s quirky invoicing process without fail.
- A sense of loss of autonomy and profile – Clients may now find themselves tied to a company that they may have purposefully deselected in favour of a smaller, more boutique-feel service provider. This may not sit well with some and prompt them to reevaluate their service provider options.
- Less agility – Not at first, but over time, clients may experience a slowing of the ship. No longer will they be able to implement a change order on the spot, or swap out one deliverable for another with a handshake. With size comes complexity and more onerous processes. And while Publicis.Sapient may not be the biggest group of agencies out there – if all the agencies came together as a single agency they would be the biggest agency – it certainly won’t operate with the agility and autonomy that its smaller agency groups have enjoyed in the past.
So while to some change may be good, and to many others it is something to fear, as a customer of Publicis.Sapient, there is some of each in this massive move. On the upside, this declared commitment and drive to be the largest and top digital agency in the world could be the battle cry that brings together the diverse teams from the landscape of agencies – Razorfish, SapientNitro, Rosetta, etc. – that to date have adhered more to a philosophy of “Vive la difference” (celebrate the differences) rather “Tous pour un, un pour tous” (all for one and one for all). If history forecasts this tale, the likelihood of a singular mega-agency resulting from the acquisition once it is finalized in the new year is slim. More likely is the case, as least for the foreseeable future, that each for the many entities involved and their clients, it will be business as usual. Only time will tell.
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