Management technology outsourcing and consulting service provider, Accenture plc (ACN) yesterday announced that it has entered into an agreement to acquire Australian digital services provider, Reactive Media Pty Ltd. The move is part of Accenture's efforts to bolster its digital marketing capabilities. However, the company has not disclosed the terms of the deal.
Headquartered in Melbourne, Reactive Media was formed in 1997. With its offices in Sydney, New York, London and Auckland, the company is one of the largest digital agencies in Australia.
Reactive Media provides brand e-Commerce and digital marketing services. Apart from this, its portfolio includes technology development, and design and usability services. Furthermore, it provides digital strategy services that include strategies to improve the brand identity of its clients on the digital platform and enhance their online presence.
Reactive Media 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 enabling CMOs to devise marketing strategies and derive higher ROI (return on investment) from it.
Since the formation of Accenture Interactive, the company has made significant acquisitions to enhance its digital marketing capabilities. In 2013, the company acquired a Hong Kong-based online marketing consultant, Acquity Group Ltd., and U.K.-based design agency, Fjord. In 2012, it acquired digital production services vendor, avVenta Worldwide, to bolster its interactive platform.
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 the 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 its long-term growth. This will also facilitate the company in effectively competing with other digital marketing service providers such as International Business machines Corp. (IBM), Dell and Deloitte.
We are encouraged by Accenture’s strategy of growing through acquisitions. However, we remain slightly cautious about the stock due to its tepid first-quarter fiscal 2015 outlook. Increasing competition from Cognizant Technology Solutions Corporation (CTSH) and FTI Consulting, Inc. (FCN) and a sluggish economic recovery may also have an impact on its growth.
Currently, Accenture carries a Zacks Rank #4 (Sell).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment