How IBM's Agencies Are Helping the Software Giant Target CMOs

Rosetta, Ogilvy Build Out E-Commerce Practices, Sell IBM Software to Their Clients

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IBM is laser-focused these days on courting the CMO suite, and, as Ad Age reported recently, it's been running TV ads targeted at chief marketers and holding events exclusively for this group.

But it's not stopping there. IBM has also enlisted its agency partners, Publicis Groupe 's Rosetta and WPP's Ogilvy, in the effort to sell its Smarter Commerce software to their respective rosters of clients.

The software -- which performs functions such as applying consumer insights to the planning of online and offline media channels, and manages supplier relationships for procurement departments--launched in March of 2011 and already it's a huge driver of growth for the company. IBM's CFO Mark Loughridge has been reporting in the company's quarterly earnings double-digit growth for Smarter Commerce since the second quarter of last year. And a spokesman for IBM said that it's projected as one of the most profitable businesses for IBM in the near future, given growth of the overall IT market is currently expected to hover around 2%-3% annually, while the rate of growth in digital analytics and elsewhere that CMOs are focused is expected to grow triple that amount.

So far, IBM has made headway in selling the software to brands such as AB-InBev, Radioshack, Virgin Atlantic, Abercrombie & Fitch, Urban Outfitters, Bank of America, Expedia, Lenovo, and UnitedHealthCare, a spokesman said. Even the American Marketing Association agreed to market the software to its vendors.

But by partnering with Rosetta and Ogilvy, IBM hopes to leverage the agencies' relationships with brands. For the agencies, it means deepening their relationship with a key client, but they're also hoping to use it to capture more business overall in growing e-commerce sector.

Publicis-owned digital agency Rosetta, which has worked with IBM for more than a decade, has agreed to a partnership whereby it will expand globally to capture a larger share of the demand for IBM's Smarter Commerce technology. Over the next three years, the agency is expanding its U.S. commerce hub on the West Coast and then setting up new centers in China, Latin America and Western Europe.

Already Rosetta is projecting revenues from the partnership of $100 million by 2013 and thinks it can net total commerce revenue of $300 million by 2015.

Said Rosetta's president Tom Adamski in a statement: "A key reason for Publicis' acquisition of Rosetta was to continue to build technology driven differentiation in the market. Our expanded partnership is a clear statement of their continued confidence in Rosetta's differentiated value proposition centered on personalization and commerce."

Meanwhile, IBM's longstanding brand agency WPP's Ogilvy announced it formalized a partnership with IBM that includes the creation of a global eCommerce practice. The practice, which is run by former Y&R exec Carl Hartman, is aiming to build up to revenues of $100 million in the next three to four years. It merges CRM and analytics capabilities of OgilvyOne with shopper-marketing skills from OgilvyAction. The practice has several offices in Asia, as well as locations in Sao Paulo, New York, London and Paris.

"We've already built an extensive network of offices and capabilities that add value to our clients businesses and has proven to be in keeping with our model to add new offerings that leverage changes in our industry such as consulting, performance marketing, sustainability and more," said Miles Young, Ogilvy's global chairman-CEO in a statement. "IBM's technology solutions in this space are unequaled and will add to the solutions eCommerce@Ogilvy delivers. At the same time, we will also provide IBM with an expanded base of potential clients."

Already, Ogilvy has brought IBM solutions to clients; Kimberly-Clark is one example.

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