Last week I spoke with Mark Bole from BigMouthMedia, about the recent merger of LBi and Obtineo (BigMouthMedia’s holding company) and €40m more capital. I wanted to get a bit more detail about what the deal means for search marketers and get a sense of whether this was a strategic or reactive response to changes in the market.
In the main, Bole stressed that the merger was a response to changes in the market and was a logical step since there was very little overlap between the two businesses. Whilst there are some strategic benefits afforded by the merger, such as becoming the largest marketing technology agency in Europe and strengthening their position in the USA, these were incidental to the main goal of satisfying client demand for fully integrated marketing campaigns.
He went on to say that clients are demanding integration. They want search to be part of integrated creative campaigns that run harmoniously across all digital channels, rather than in it’s own marketing silo. In essence, clients are thinking bigger and broader and this merger enables the company “to satisfy the bigger stuff”. The merger is mainly about driving scale within the business and developing strong service capabilities within each specialization. Bole still felt it was important to keep a localized service and said there will be no change in service for smaller clients and they will still focus on finding the right business model to fit each client. There is no one size fits all solution, but with an increase in demand for clients to run campaigns across multiple markets BigMouthMedia is now in a position to serve them better.
What was most interesting about what Bole was saying, was how adamant he was that clients are driving the market now. There used to be days when search marketers would have to keep the client updated on the latest changes and opportunities within the digital landscape, but now it seems the boot is on the other foot. Clients are stepping up to the plate, at the right time, armed with the right information. They realize that the earlier they get involved in site marketing the better their campaigns perform, so they are involving search earlier in the media planning stage. Clients are also getting more pragmatic and are looking to optimize spending of an entire campaign via one agency rather than having to manage different and separate ROI targets among a pool of agencies. Enduring partnerships seems to be the way forward according to Bole, who also commented on the shift in budget spending from above the line channels (e.g. TV, outdoor), saying that money spent there had reached the inflection point (at least in the UK) and spending is likely to accelerate towards below the line channels (e.g. search, trade shows, direct marketing).
Consumer behavior drives the changes in marketing budget allocation and Bole said client demands were motivated by three new consumer trends.
- People are swapping time spent in front of the TV for time spent online. Attention spans were shorter and there was an increase in demand for bitesize content. Buying preferences are changing according to the social networks they are using. Not only does, everyone want quicker, faster and easier, but consumers are also more willingness to spend time researching deals and reducing costs.
- Social media is disrupting traditional broadcast marketing. The social media ‘backchannel’ is influencing buying behavior and brands are realizing that they need to engage with it. Clients want to be closer to understanding what is driving ROI.
- Mobile & portable devices are changing the frequency of visits and consumption of online content. Ubiquitous access is changing the product buying cycle. Furthermore location data and linking contacts via mobile presents a plethora of new opportunities.
I asked Bole if these changes in consumer behavior were leading to a change in conversion metrics. He responded adamantly that “conversion is changing”, going on to say that consumer behavior starts and ends in a lot of different places now. A consumer path can go from Facebook, to search, to Twitter and back to search again. He also re-iterated what many have known for a long time now, which is that the first/last click fallacy is something that agencies want to get to the bottom of, going on to say that whilst such analytics loop holes were not a driver for the BigMouthMedia/LBi merger, per se, it was an area he was excited about. The new company could bring together more marketing technology from the best of the old companies – they had more tools to allow marketers to really understand what is driving ROI beyond the click, and it was his belief that tracking specific things in certain ways could deliver the best overall ROI.
So, as i said earlier, it seems there is going to be little change in the everyday business strategy of the newly merged company, but Bole’s team response to the changes in the marketplace struck me as a lesson from which many others could learn. It struck me that not only had a one of the first search marketing agencies in Europe come of age, but so had the search marketing industry in general.
The trickle is starting to flow and there’s a lot of above the line budget to start flowing into the hands of smart digital marketers. Watch out for competitive times ahead. Start adapting now.