Deloitte has scooped up the 110-employee creative agency Heat, in a move that underscores how chief marketing officers are becoming a bigger part of the IT spending conversation given their role creating a positive customer experience. Here are the key details from the Wall Street Journal:
In addition to coming up with communications strategies, marketing chiefs are under the gun to drive tangible results and help reinvent the business. Plus, CMOs are spending more money on information technology services nowadays.
As consulting firms try to win more work with the digital marketing side of the business, they are sharpening and building out their creative credentials, long the territory of traditional advertising firms.
Heat, which won several awards during last year’s Cannes Lions advertising festival, is the 11th digital marketing company that Deloitte has bought since it launched its creative consulting unit, Deloitte Digital, in 2012. The unit, with about 7,000 employees and $2.1 billion in revenue last year, is one of the biggest digital agencies in the world.
Deloitte is just one of the many consulting firms and technology consultants that have created big digital marketing and design divisions in the past few years, thanks in part to purchases of companies with capabilities such as building user experiences, digital marketing, design, and Web and mobile development skills. Now many are starting to ramp up their creative expertise.
The WSJ report notes that PricewaterhouseCoopers LLP is currently planning to buy a number of digital creative firms, and that IBM bought three marketing, creative and design companies this month alone.
And the reverse has been happening as well, with design-oriented companies acquiring peers that also have systems integration capabilities. A key example of this was Publicis Groupe's $3.7 billion acquisition of Sapient, which closed last year.
Analysis: Transformation On Two Levels
"Deloitte, IBM, and Accenture have been in a three-way arms race to secure the most creatives to match their technical prowess," says R "Ray" Wang, founder and CEO of Constellation Research. "This is more than just moving into Madison Avenue, it's about making sure these consultancies have a balance between creative and tech. Design thinking requires a diversity of thought to unlock solutions to questions that have never been asked. It's this level of diversity that's required to enable successful digital transformation."
One key question for CMOs pursuing such a transformation is how to select a partner possessing the right mix of creative skills and technical chops.
"The best way to select today is by reference," Wang says. "There are rock stars on each of these teams. Client references and individual stars still dominate this category, as methodologies are scant."
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