March 17, 2008
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The news on this second day of Search Engine Strategies New York is that 360i has picked up award-winning digital design, development and marketing firm i33. The acquisition brings expertise in designing and developing social media applications, widgets, websites and other rich media experiences, as well as clients Marvel Entertainment, PBS, New Era Cap, Target and Borders.
Founded in 1998 by Dave Williams and Bryan Kujawksi, 360i has spent the past decade organically evolving into an integrated digital marketing agency. In speaking with Sarah Hofstetter, VP, emerging media & client strategy for the firm, I learned more about this approach to adding more services. “Creative is not just about pretty pictures. It is about understanding consumer insights and the best way to connect,” she said.
Prior to the acquisition, she oversaw an in-house team built to meet clients' growing digital needs, such as designing a Facebook page for H&R Block, developing widgets for a product launch, or experimenting with a new API. Having this competency in the firm's DNA was a plus when partnering, and eventually acquiring, i33. “When we brainstorm with them, we are completely on the same wavelength,” said Hofstetter.
360i is not the first to grow and change through acquisition. Many will recall that the aQuantive we know today is the result of multiple acquisitions made by Avenue A, now one of its business units. More recently, iCrossing acquired multiple competencies by picking up NewGate, Spannerworks, Sharp Analytics and Proxicom over the past 18 months.
So what does this activity mean for the search engine marketing set? Most importantly, the industry has matured. Not only is consolidation happening among search engine marketers that prefer to remain independent, but many others have been acquired by large agency conglomerates. Since the acquisition of Outrider's parent company by WPP in 2001, iProspect landed within the Isobar family, Performics paired with Doubleclick, neo@Ogilvy (a WPP firm) took on Global Strategies International, Reprise Media was picked up by IPG, and so on.
The more delicate sign, however, is that search has become a critical tool in the digital toolbox, and perhaps not viable as a standalone business for most search engine marketers. I can count one hand, make that a few fingers, the number of independent search engine marketers that only offer SEO and PPC, and are not looking to exit or evolve their services within the next few years. The ability to remain independent remains a luxury for all but the biggest players with solid operations, and smaller shops that have carved out a niche market.
The decisions until then will be interesting to watch. Acquisitions of creative, development, social media, mobile and video services are likely to occur. Some will happen organically; others will be artificially glued like limbs on a body. Only time will tell which will succeed. If there is one guarantee, it is that the landscape in 2009 will be very different than the landscape today.