SapientNitro: Attack ahead of the pack

Rosie Baker
By Rosie Baker | 20 February 2015

Sapient has been sitting at the juncture of marketing and technology since well before it was in vogue. And now, with the acquisition of the network by Publicis Groupe, that future-gazing culture will be wrapped into the French network.
It's not long since the ultimately unsuccessful merger of equals – Publicis and Omnicom – was the talk of the town. Had it gone ahead it would have created the largest holding company group in the world. But size isn’t everything. With Sapient, Publicis has created a much more interesting beast.

The group has eyed Sapient as a boost to its digital operations. Publicis CEO and chairman Maurice Levy has said in the past that it has remained too traditional, for too long. But for US$3.7 billion – the French group’s biggest acquisition – it has bought much more than digital knowhow. In confirming the deal, Levy says it will help achieve Publicis' goal of getting 50% of revenue from digital and technology three years ahead of its 2018 goal, creating an €8 billion Euro company in the process.
Usually referred to as a digital agency, Sapient’s roots are actually hardcore tech. It was born from the technology world and built IT systems, then moved into e-commerce platforms and large-scale online systems such as banking in the 90s.

Since the start of the Millenium, it has been moving into the creative industries, after spotting ahead of the pack that marketing was about to get turned on its head, thanks to the infiltration of technology.

“There was the realisation that there’s a massive market that’s about to get disrupted,” says Marcos Kurowski, MD of SapientNitro Australia.

“Marketing’s history has been very traditional and it’s enormous in scale and the overall size of the dollar spend in that space. It’s going to be digitised and clients are going to need help in navigating a complex new world. They’re going to need the ability to understand and deliver creativity and user experience, and they’re going to need to have a deeper understanding of technology. And guess what our core competencies are,” says Kurowski.

SapientNitro also has a huge footprint in India, where 9000 of its 12,000 global staff sit. Most are developers, but it is also building a creative capability. So large is its operation there that the agency owns and operates a bus company, solely to get its staff to work.

In the local market, though, SapientNitro has a very different history and challenge.

The creative Nitro side of the business was more recognisable than Sapient, which hadn’t operated here, when Sapient bought Chris Clarke’s Nitro in 2009. It is no stranger to mergers and acquisitions, nor to the fact that they often pan out very differently to analysts’ slide presentations and forecasts.

“[When we acquired Nitro] we were very deliberate in making a statement,” says Kurowski. “A key part of our history is being four years ahead of where the market is going to go. That’s our survival in a world where we’ve historically been a relatively small company.

“Our entire strategy has always been about creating new markets that only we can serve. So we invent with new markets, we’re the first ones there and that is what allows us to succeed. So in that acquisition, our intent was to create this new market, this converged marketing and technology space, and get there first – knowing full well that everyone else was eventually going to figure out that they needed to go there.”

“And if you look at the last three years, Accenture is out there buying creative shops left, right and centre. IBM
Interactive is doing the same thing. Holding companies are buying digital assets and smashing them in. But converging creativity and technology is not a capability question. It’s not A+B and you get C. It requires a much deeper, much more fundamental change in how people think and act. They’re such different worlds.”

Kurowski admits that in the Australian market SapientNitro doesn’t have anywhere near the brand recognition it has in the US and Europe. Over the last few years, Kurowski says, SapientNitro has “re-engineered and rebuilt” the agency from the ground up, knitting together diverse set of skills within its senior management team. The Publicis acquisition will do much toput it on the map.

The merger stables SapientNitro alongside Publicis’ existing digitally led shops, Razorfish and Digitas, and the interplay between the three will bear watching. Many are wondering where the acquisition leaves Razorfish, which just a year ago set out its vision for the future, eyeing off the management consultants and edging into strategy territory.

Can all three brands co-exist with overlapping capabilities – or will there be some rationalisation in the market or merging of the shops? Whether Razorfish takes a strategist kind of role throughout the Publicis Groupe, leaving the execution side of things to Sapient, is a possible outcome, but, whatever happens, Kurowski doesn’t believe there will be any sudden and significant shifts.

“Now is when the clock starts ticking and little by little we’ll start to see planning kicking into high gear. There’s a lot of work to do because Sapient, Razorfish and Digitas are large and complex organisations. It naturally tends to start happening first in the US and Europe, but we’re already being approached to collaborate with our digital cousins at Razorfish and Digitas,” he told AdNews after the deal was finalised.

“I would be surprised if there were any dramatic moves around keeping or dropping brand names in the next 12 months. It’s such a complex and strategic move that it would need a lot of thoughtful planning. Each of the three brands has strong and entrenched client relationships.”

Sapient, with its hardcore tech build skills in e-commerce and systems, was ahead of the pack in converging marketing and technology and is something of a sleeping dragon – for Publicis the aquisition is a stealth acceleration into that space.

This story first appeared in the AdNews print edition on the 20 February 2015.
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