Management technology outsourcing and consulting service provider, Accenture plc (ACN) recently completed the previously announced (May 20) acquisition of Hong Kong-based online marketing consultant, Acquity Group Ltd. for roughly $316.0 million in cash. The move is part of Accenture's efforts to bolster its digital marketing capabilities.
Founded in 2001, Acquity Group provides brand e-commerce and digital marketing services. It provides digital strategy services that include strategies to improve the brand identity of its clients on a digital platform and enhance their online presence. Its clientele includes industry leaders such as Adobe Systems Inc. (ADBE), Saks Inc. (SKS), Mine Safety Appliances Co. and Penske Automotive Group Inc.
Acquity Group’s intellectual properties will join Accenture Interactive platform, which is the company's marketing-services arm. Accenture Interactive was formed in 2009 (in association with its client Procter & Gamble Co. (PG)) in order to deliver superior consulting, technology and analytics services mainly to chief marketing officers (CMOs).
Competent marketing is the key to success for every organization. Marketing and digital executives of a company are responsible for developing digital marketing campaigns, marketing contents, e-commerce and marketing operations. Accenture Interactive is a well-integrated platform that helps CMOs devise marketing strategies and derive higher ROI (return on investment) from it.
Apart from Acquity, Accenture completed the acquisition of U.K.-based design agency Fjord (in May) and digital production services vendor avVenta Worldwide (in Oct 2012) to enhance its interactive platform. This will enable Accenture to address the critical needs of CMOs while digitizing their marketing plans.
According to U.S.-based IT research firm Gartner Inc., firms generally spend 2.5% of their revenues on digital marketing and the spending is expected to go up by roughly 9.0% in 2013. One more important statistics from Gartner is that around 50.0% of digital marketing activities get outsourced.
Considering the growing need for digital marketing, we expect Accenture’s investments in its digital and marketing capabilities to pay off soon.
We are encouraged by Accenture’s strategy of growing through acquisitions. However, increasing competition from IBM Corp., a strained spending environment and Accenture’s broad European exposure (roughly 40.0%) may temper its growth prospects to some extent.
Currently, Accenture has a Zacks Rank #3 (Hold).
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