French holding company Publicis Groupe is making another significant bet on technology, launching a division that will license software to clients to manage consumer relationships in social media and mobile.
The division, called CRM365, will target smaller businesses who can just license its software as a service in addition to the typical clients of agency holding companies, and will be led by Digitas' former global chief marketer Seth Solomons who has moved over to the sister agency to become CEO.
It's the latest move toward technology-driven marketing for Publicis Groupe , which has doled out billions to buy up the biggest digital agencies Digitas, Razorfish and Rosetta in recent years. But in this case, rather than buying up a tool to harness big data-after all, social-media software startups such as Buddy Media and Vitrue abound-Publicis' digital and media agency umbrella unit Vivaki is building its own with the help of software vendor Conversen.
"Publicis has made bets and is becoming a communications-technology company," Chris Stutzman, a principal analyst for Forrester toldAd Age earlier this year in reference to its acquisition strategy, prior to the CRM365 announcement.
"[In relationship marketing] the challenge has been scale, real-time relevance and the right piece of technology," said Mr. Solomons, who has spent 20 years at Digitas and WPP's Wunderman previously. "We hear even in organizations that have a sophisticated understanding of their proprietary databases, there's still confusion when it comes to social, mobile and even digital data." Publicis pioneered the software-development partnerships model with Vivaki Nerve Center, which packages technology from vendors for its own clients.
So what will the CRM365 software do exactly? It's said to pipe in various data sources to react to consumers with tailored messages on whatever mobile devices or social network they're currently on. For example, when someone checks in on Foursquare within walking distance of a Starbucks and credit-card history shows that person is a big coffee drinker, the chain can text message a coupon.
CRM365 is built to license software to smaller clients that can't afford agency services, upsell creative and analytics services and partner with Vivaki sibling agencies, Mr. Solomons said. Clients of Vivaki agencies include Delta, Samsung, Best Buy, Mercedes and Intel. The new agency will share software licensing fees with Conversen, be based in New York and, so far, employs seven full-timers and more than 30 consultants. The division has yet, however, to sign a client of its own.
"Marketing has not historically used software to manage customer relationships," said Reggie Bradford," CEO of social-media software company Vitrue. "But [marketers will] increasingly adopt software as a service to manage their consumers whether they're on YouTube, Facebook, Twitter or wherever the social graph takes them."
It's also important to note that it's getting crowded under the Vivaki umbrella; the number of brands that report through that structure are growing and fast. What was once media agencies Starcom Mediavest Group and Zenith Optimedia and digital agencies Razorfish and Digitas now include social media specialist Big Fuel and the new data expert. The holding company at large also houses Rosetta, another big digital shop.