Sapient is a company with many faces, and revenue sources. About 70% of its business comes from the SapientNitro digital agency. Another 25% derives from Sapient Global Markets, which serves the capital and commodity market needs of clients in the financial and energy sectors. And 5% is in government services, where it has done work for the Library of Congress, National Cathedral and others.
Even within the SapientNitro agency, there are many angles. The company bought an above-the-line agency, Nitro, in 2009. More recently it has acquired firms (IOTA Partners, Second Story) that do work around digital experiences for retail stores and other physical environments. One of its big clients in this area is Vail Resorts, for whom it created a robust experience built around RFID chips embedded in season lift badges. Such place-based executions can spin off all kinds of data that can be used to customize future media and creative.
Sapient also recently bought MPhasize, which provides mix modeling capabilities to support media investment decisions.
These investments come at a challenging time for digital agencies, many of which are struggling to escape their primary client association as web development shops, ill equipped to take the lead on creative branding assignments or on global media execution. But Sapient appears well positioned, according to financial analysts.
"We continue to view SAPE as one of the best-positioned agency stocks...as peers begin to follow SapientNitro's lead in e-commerce platforms," BMO Capital Markets analyst Dan Salmon wrote recently. "And with the IT services businesses ramping back up, investors can now look out and see an accelerating revenue story again."
Many traditional agency businesses, and some technology consultants, are embracing Sapient's way of doing things. In a recent AdExchanger interview, WPP CEO Sir Martin Sorrell said it views itself as increasingly competitive with "the Sapients and Cognizants" -- i.e. companies that embrace an integrated approach to marketing and technology.
In the below interview, CEO Alan Herrick talks about Sapient's recent M&A, its plans for media, and the future of marketing technology.
AdExchanger: What role should technology play in the agency model? And how does SapientNitro tackle this question?
ALAN HERRICK: This goes back to various beliefs that we've held for probably 20 years. When you look at the role of technology in people's lives, it often fails. When you look at technology done well, the creative element and the technology elements are inextricably woven together. That has been one of the key tenets in our thinking for a long time -- how this whole ecosystem around storytelling and experience and technology and kiosks and tablets comes together.
It's all about, how do we get the creative and technology together to really help tell a participatory, interactive, compelling story that goes on in perpetuity? That's been a core part of our ethos for a long time.