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.