Updated 7/2/14, 3:22 p.m.
For the second time in less than a year, CRM and database marketing agency Merkle is on the acquisition prowl. This time, it gobbled up RKG, an agency that provides paid search, social marketing and comparison shopping engine services.
With the RKG acquisition, Merkle CEO David Williams said the agency is looking to up the ante on “addressability at scale.” In other words, to tap into the audience milling about the usual digital platforms, including Facebook, Google and Twitter.
Addressable media is a big focus area for Merkle. In speaking to AdExchanger several months ago about its April acquisition of Chicago-based digital and direct agency New Control, Merkle’s EVP and digital agency lead, Craig Dempster, said “creating integrated marketing communications in addressable is attractive to us.”
RKG’s role in Merkle’s addressable agenda will be to expand the latter’s retail offerings and relationships. RKG will give Merkle access to the agency’s existing client roster of retail companies such as Express, Herman Miller and Urban Outfitters.
Retail is just one industry sector in Merkle’s basket. The CRM company, which takes an industry-focused approach to its digital media strategy, provides vertical-centric solutions for CPG, B2B, tech, entertainment, nonprofit, banking and finance.
Social CRM is an especial opportunity in the retail banking and credit card marketing space, where Merkle already has a presence, bolstered by its purchase of New Control, whose clients include Chase, Fifth Third Bank, PNC Bank and Visa.
But RKG and New Control are only the two most recent in a long string of Merkle acquisitions that began in 2011 and now include data exchange Brilig, responsive design company 5th Finger, social commerce platform Social Amp and search marketing and media agency IMPAQT.
Although the terms of the RKG deal weren’t disclosed, Williams noted RKG’s 220 employees, including RKG CEO George Gallate and the company’s co-founder and chief marketing scientist, George Michie, will join Merkle’s digital agency group. These additions bring Merkle’s digital agency group headcount to 650 and its total agency headcount to 2,400. Investment bank Jordan Edmiston Group Inc. represented RKG in the transaction.
Having snagged RKG, Merkle has a collective investment on media-related technologies is more than $500 million, and it now appears the company is ready to settle down and put it all to work. Although Dempster didn’t say that Merkle’s officially off its acquisition kick – ”We’re always going to try and evolve and move where the market is headed” – Dempster did intimate that Merkle might be finished with its digital agency buildout, at least for the moment.
“We feel like we’re at a level now where can can compete at the top of the marketplace,” said Dempster, who sat down with AdExchanger to talk about the company’s plans.
AdExchanger: In light of all the recent acquisitions, what is Merkle trying to become?
CRAIG DEMPSTER: We’re trying to be in the position where we’re a full-scale digital media agency for customers; not just search, not just social performance or display, but the whole thing— and then also driving the strategy, the planning, and the execution.
To do that an agency needs a large technology capability to manage audience, data, and marketing information for brands. It needs large scale analytics to mine information, it needs targeting insights, measurement, and to be able to activate that measurement insight into digital media.
What about RKG in particular?
RKG has strong retail relationships and we feel like together with our other competencies, we’re going to grow those relationships and help those companies become better performance-based marketers.
Merkle is big on what it calls “addressability at scale.” What does that mean in practical terms?
We define it as the ability to execute digital communications to the individual at a level of scale where we can create a competitive advantage. It’s about helping brands find audience at a level of scale where they can acquire and grow their customer bases using those digital opportunities as the competitive differentiator.
Is Merkle a one-stop-shop?
Merkle sits on top over 150 data-management platforms that host and manage top brands and we connect those data assets to our digital agency skillset. If you look at our competitors in the digital agency landscape, they don’t have access to that information because they don’t sit on top of databases and 200 higher degree statisticians who have been in the business and know how to mine information. They come from the database marketing community, which is fine, but they’re not building their digital agency skillsets.
Who, for example?
Acxiom, for one. They have their own strategy, but that strategy is to be a platform provider to the marketplace, and for them to develop agency skillsets would fly in the face of their strategy, whereas we’re excited about creating those capabilities.
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