Accenture plc ACN recently announced the acquisition of Brazilian digital services provider, AD.Dialeto. The move is part of the company’s efforts to bolster its digital marketing capabilities. The terms of the deal have not been disclosed.
Based in Sao Paulo, AD.Dialeto helps companies in transforming their businesses through its end-to-end marketing services. Over the years, the company has grown into one of the largest independent digital agencies in the country in terms of headcount.
Furthermore, it provides digital strategy services that include strategies to improve the brand identity of clients thereby helping them to maximize return on investment (ROI) of their digital programs. The company through its innovative strategies has enabled several multinational and local companies, such as B2W, Electrolux, Accor Hotels, Rossi Telhanorte and Serasa Experian, to boost results.
AD.Dialeto will join Accenture Interactive platform, part of the company's digital marketing-services arm, Accenture Digital. Accenture Interactive was formed in 2009 to deliver superior consulting, technology and analytics services to chief marketing officers (CMOs).
Competent marketing is the key to success for every organization. Marketing and digital executives of a company are responsible for developing digital marketing campaigns, marketing contents, e-Commerce and marketing operations. Accenture Interactive is a well-integrated platform that enables CMOs to devise marketing strategies and derive higher ROI from it.
Since the formation of Accenture Interactive, the company has made significant acquisitions to enhance its digital marketing capabilities. Earlier this year, the management technology outsourcing and consulting service provider completed the acquisition of Reactive Media Pty Ltd., an Australian digital services provider. In June, the company acquired Brightstep, a Swedish digital content and commerce solution provider.
Moreover, in July, Accenture strengthened its digital marketing capabilities with the buyout of Chaotic Moon, a creative technology studio in Austin, TX, and Pacific Link, a set of independent digital agencies serving Hong Kong and Greater China.
According to the U.S. IT research firm Gartner Inc., companies have spent nearly 10.2% of revenues for marketing in 2014, of which one-fourth was invested in digital marketing. The report also suggests that 51% of these companies are planning to increase their 2015 digital marketing spending by 17% on an average.
Considering the growing need for digital marketing, we expect Accenture’s investment in digital and marketing capabilities to boost long-term growth. This will also help the company in effectively competing with other digital marketing service providers such as International Business Machines Corp. IBM, Dell and Deloitte.
Although Accenture’s strategy of growing through acquisitions is encouraging, we are slightly cautious because of the intensifying competition from the likes of Cognizant Technology Solutions CTSH, and a strained IT spending environment.
Currently, Accenture has a Zacks Rank #2 (Buy).
Another well-ranked stock in the technology sector is Mellanox Technologies, Ltd. MLNX, sporting a Zacks Rank #1 (Strong Buy).
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