Dentsu buys LiveArea in $250M bet on Merkle’s commerce expansion – Marketing Dive

Dive Brief:

  • Dentsu Group acquired LiveArea from global commerce services firm PFSweb for $250 million, according to an announcement.
  • The deal supports Dentsu’s Merkle agency as the data unit plots a larger expansion into commerce. LiveArea’s 590 employees will transition to the Merkle team along with President Jim Butler, while the company will operate under the name LiveArea, a Merkle company.
  • Dentsu is looking to fortify a larger ambition to eventually generate 50% of revenue from customer transformation and technology. The transaction offers another signal that agencies are moving quickly to capitalize on an online shopping boom spurred by the coronavirus pandemic.

Dive Insight:

Merkle is acquiring a firm focused on connecting brands to consumers through “creative commerce experiences” as it tries to account for the rapid acceleration in e-commerce adoption under the pandemic. The data unit, which Dentsu gained full ownership over last year, joins other agencies in directing more investments to online sales channels as COVID-19-driven shopping habits are expected to stick even after the health crisis. E-commerce retail sales in the U.S. grew over 30% year-on-year in 2020, according to Dentsu, and are forecast to see continued double-digit growth in the medium term.

LiveArea, which wields a sizable team, has long-standing relationships with technology partners Salesforce, Adobe and SAP and has worked with blue-chip brands such as L’Oréal, Marc Jacobs Beauty and Adidas, according to its website. The company handles a wide range of commerce specialties, including order management systems, loyalty programs, social, mobile and web commerce functions and integrations in emerging tech areas like virtual/augmented reality and livestreaming.

“LiveArea represents a unique opportunity for Merkle to significantly expand our commerce capabilities — broadening our commerce footprint in the U.S. market while also adding commerce expertise in EMEA,” Michael Komasinski, president of Merkle Americas, said in a press statement.

Marketing technology and ad-tech dealmaking have broadly picked up as companies try to meet transformational needs stemming from the pandemic. Omnicom Group in April acquired digital marketing firm Areteans as part of its moves to provide marketers with deeper expertise in digital transformation and customer experience. Unilever, Macquarie Group and QBE Insurance Group were among the marketers already using Aretean’s technology to improve their digital marketing and e-commerce functions.

Acquisitiveness has also accelerated on the brand side of the business: Yum Brands, the owner of KFC, Pizza Hut and Taco Bell, made three tech acquisitions so far in 2021 to grow its data-driven marketing and e-commerce skill set.

A growing number of e-commerce pivots arrive as agencies seek new avenues for growth following a down pandemic period. Dentsu saw organic revenue, a key metric of growth for the category, slide 2.4% year-on-year in the first quarter of 2021. The ad holding group in December announced a restructuring plan that involved cutting thousands of jobs in response to pandemic headwinds.

Spread the love

Leave a Reply

Your email address will not be published.