News hit this Monday that Powered has acquired three social media agencies: crayon, Drillteam and StepChange. I just had a skype video conversation with Aaron Strout and Joseph Jaffe to learn more, here’s my take. You can read crayon founder Joseph’s take and Aaron Strout the CMO of Powered and a quick mention in NYT.
A Solution Set of Services Bolsters a Marketing Platform
I’ve heard of crayon, and have many conversations and even podcasts with founder Joseph Jaffe, I’ve also spent time with the Powered executive team last year. Stepchange is a 13 person team out of Portland focused on Facebook Apps and mobile, and Drillteam, from NY, has been around for 10 years and focuses on experitntial and advocacy marketing, such as connecting events to online like street teams, guerrilla, and ambassador programs. Powered isn’t just a community platform, I learned they have other marketing features that really intent to provide a suite of offerings.
Natural Evolution Of A Growing Market:
- Consolidation happens in downturned markets. As the recession starts to show signs of it lifting, now’s a great time for companies to come together and create a greater value. We saw this type of acquisition behavior from agencies during the first boom, and we should expect similar patterns here.
- Acquisition provides key services software platforms can’t fill. It makes sense for Powered platform to partner up with a service(s) teams that have already been successful for some time, this improves the time to market to deployment. In addition to coming with a book of business, they can quickly deploy the Powered platform, expanding the software footprint. Joseph Jaffe has strong thought leadership, an existing marketing brand, and reach needed to the group.
- Yet, brings risk for Powered and new partners. First of all, there are some big names coming together, the real stress will be can these cultures, and their strong willed leaders, be able to jive together. Secondly, it’ll be interseting to see if Crayon and services teams forces stragies on their clients that involve the Powered platform. I asked if there are any layoffs coming from consolidation, they haven’t made any plans, but when you have 4 companies coming together expect redundancy.
Impacts To Customers, Partners and Competitors:
- Social Agencies should rekindle and bolster relationships. This impacts other social agencies like Stage Two Consulting, Social Media Group, AdHoc, Ant’s Eye View, ForumOne, Community Roundtable, Shift Communications, Dachis, FutureWorks, New Marketing Labs, who may be at medium and small tier, they should quickly partner up with other firms to increase their value.
- Customers of crayon, Drillteam, and Stepchange should request agnostic recommendations. Any client of these three agencies should make sure that the strategy they are being offered includes other vendors and platforms –not just the Powered platform and Facebook platform. Remember, first find out where your customers are online before choosing the tools to use.
- This is competition for larger agencies –yet savvy agencies will partner. This is a threat to large agencies like Organic, Razorfish, Ogilvy, and Edelman. Yet the smart agencies won’t get defensive, they should partner with this team, and figure out what offerings they can offer that they don’t have in their portfolio.
Congrats to the Powered, crayon, Drilldteam and Stepchange team for this merger, I’m excited to see the industry emerge from small disparate startups to a larger entity going forward.
Thanks for the mention, we at @antseyeview have seen some similar trends and pressures. In the early stages, talent, experience and alignment amongst the principals is critical to success – hence our early acquisition of Wabash and Lake, bringing on board proven leaders in Ben McConnell and Jackie Huba. Like Aaron, I think we bristle a little at the term “agency,” but that philosophical point of view isn't always worth debating. The bottom line is that the industry is looking for proven leaders that can drive real change forward and services firms need to grow and or align with others where they can deliver on that need. 2010 promises to be an exciting year of change, but 2009 was pretty exciting too and so will be 2011! In the grand scheme, the transformation to the customer enlightened & engaged culture is just beginning.
Sean O'Driscoll
CEO, Ant's Eye View
http://www.antseyeview.com
Jeremiah,
It was great catching up with you this morning. And thank you for the resulting write up. I'm amazed at how fast you were able to digest our news and turn around with a thoughtful, well-written blog post.
I think you've captured all of the salient points from our conversation and certainly bring up an important one in our success will lie squarely in our ability to assimilate our skill sets while subduing our strong personalities. Fortunately, we've had the luxury of spending the last eight months together getting to know one another. While this doesn't guarantee that we'll always agree with one another, we've come to a place where we're pretty comfortable with each others strengths and weaknesses.
Finally, I like your recommendation of our existing clients making sure that we are offering “best of breed” tools and platforms and not limiting customers to our own proprietary platforms. Of course we feel that we have some pretty darn good platforms to offer but as part of offering strategy/recommendations, we need to be sure that we're always acting in our clients' best interest. We expect that our clients won't hesitate to keep us honest on this front.
Thanks again for taking the time to meet with Joe Jaffe and myself. We look forward to continuing the conversation soon. Maybe at OMMA Social? Would love to buy you a drink.
Best,
Aaron | @aaronstrout
Indeed…and we don't like the term social a whole lot better. I'm in the customer experience camp 🙂
sean
Thanks for the mention, we at @antseyeview have seen some similar trends and pressures. In the early stages, talent, experience and alignment amongst the principals is critical to success – hence our early acquisition of Wabash and Lake, bringing on board proven leaders in Ben McConnell and Jackie Huba. Like Aaron, I think we bristle a little at the term “agency,” but that philosophical point of view isn't always worth debating. The bottom line is that the industry is looking for proven leaders that can drive real change forward and services firms need to grow and or align with others where they can deliver on that need. 2010 promises to be an exciting year of change, but 2009 was pretty exciting too and so will be 2011! In the grand scheme, the transformation to the customer enlightened & engaged culture is just beginning.
Sean O'Driscoll
CEO, Ant's Eye View
http://www.antseyeview.com
Jeremiah,
It was great catching up with you this morning. And thank you for the resulting write up. I'm amazed at how fast you were able to digest our news and turn around with a thoughtful, well-written blog post.
I think you've captured all of the salient points from our conversation and certainly bring up an important one in our success will lie squarely in our ability to assimilate our skill sets while subduing our strong personalities. Fortunately, we've had the luxury of spending the last eight months together getting to know one another. While this doesn't guarantee that we'll always agree with one another, we've come to a place where we're pretty comfortable with each others strengths and weaknesses.
Finally, I like your recommendation of our existing clients making sure that we are offering “best of breed” tools and platforms and not limiting customers to our own proprietary platforms. Of course we feel that we have some pretty darn good platforms to offer but as part of offering strategy/recommendations, we need to be sure that we're always acting in our clients' best interest. We expect that our clients won't hesitate to keep us honest on this front.
Thanks again for taking the time to meet with Joe Jaffe and myself. We look forward to continuing the conversation soon. Maybe at OMMA Social? Would love to buy you a drink.
Best,
Aaron | @aaronstrout
p.s. meant to thank Brent, Adam and Rachel for their kind words. Much appreciated!
p.p.s. Sean. Good point about the term “agency.” We went back and forth about this term but felt like at the end of the day, it was the term marketers (our target audience) were most comfortable with.
Indeed…and we don't like the term social a whole lot better. I'm in the customer experience camp 🙂
sean
sports shoes
Nike Sport Shoes
Women's Nike Sport Shoes
Men's Nike Sport Shoes
Powered and Social Media Group are in talks at the minute about SMG being taken over.
A good PR person must be aware of all possibilities that a situation might offer. He must make scenarios for every turn of faith. You gave a great advice concerning companies, that they ought to come together and create a greater value, but, also, as you pointed out, the economical crisis just “starts to show signs of it lifting”. Until it does, we should search for revenue enhancement solutions given by Encore marketing.
I agree that for larger agencies to continue to be profitable they must be open to using the services of other sources, which many do anyway, as they have used outside vendors for decades, and electronics is jsut another tool that they will embrace as more people are using the technology.
But how does this affect the competitive nature of business? We cannot be everything to everyone, but need to be a leader in our own niche. Therefore, the relationships we build and maintain are ever more important, and that means strong commitments to communications and interpersonal skills.