• January 15, 2010
  • By Jessica Tsai, Assistant Editor, CRM magazine

Powered Powers Up Social Offering with 3 Acquisitions

Closing three acquisitions simultaneously is no easy task, but Powered's pulling it off, determined to "hit the ground running," says Aaron Strout, the company's chief marketing officer. The three-company roll-up includes social media marketing firms Crayon, Drillteam Marketing, and StepChange, each at an undisclosed price. The acquisitions, Strout says, are part of Powered's grand plan to launch a full-service social media agency that will help companies navigate the complexity of the social Web.

The decision to complete all three transactions together was for logistical reasons, Strout explains. Not only was the intent to save time and resources, he adds, but "we wanted to get the cultural impact and the disruption of companies all done at the same time, rather than dragging it out."

Looking back, Strout calls 2009 a "throwaway" year. He notes, however, that there's an upside to the effects of an economy that stymied advancement: Without it, he says, Powered probably wouldn't have had the motivation needed to embark on even a single acquisition, let alone three. "Down years drive this kind of consolidation and, sometimes, drive innovation," he says. Historically focused on building branded communities, Powered had dabbled in external networks before but Strout says the three acquisitions will contribute complementary skill sets. 

Crayon, a social media consulting company, will bring the strategy component, as well as reputable industry figures such as Joseph Jaffe, author of Life After the 30-Second Spot and, most recently, Flip the Funnel. Of the three acquired firms, only Crayon will drop its name and become tightly integrated within Powered. Drillteam and StepChange each will operate as a Powered company but will retain their names -- in part, Strout says, because of the nature of the deals and partly because of the niche sectors in which each firm has an established reputation.

According to Strout, Drillteam is the "jack of all trades" when it comes to social media, delving into both the strategy and tactical sides of the equation. What the company does uniquely well, he says, involves engagement marketing, specifically "earned media" -- a concept whereby brands, instead of going out and paying for sponsorships, utilizing outreach and ambassador programs across social platforms such as Facebook, Twitter, blogs, and communities to identify influencers and activate customer advocates.

Along with Buddy Media, Vitrue, and Context Optional, StepChange is one of only four vendors approved by Facebook for application development, which Strout says will help Powered penetrate the Facebook community and enhance offerings across mobile devices, other social networks, and widgetized ads. The Facebook features that StepChange works with include:

  • applications;
  • strategies;
  • fan pages; and
  • custom tabs.

More important, Strout says, StepChange isn't "just doing them for 'doing them's' sake, but actually tying [the Facebook applications] to advertising campaigns and marketing efforts." Expertise in the mobile space will be particularly applicable as the smartphone industry continues to boom, becoming the first screen many people will access each day.

While Strout says there wasn't a significant amount of customer overlap among the four companies -- the few include Nestle and Kodak -- the deal does increase Powered's total client base from 10 clients to 60. The combined offerings, he adds, will enable Powered to respond to "major" requests for information and requests for proposals. "We're meeting a need that previously wasn't there, or wasn't being met as fully as it could [have been]," he says. Traditionally, companies had the option of either piecing together solutions from small boutique firms, or else hiring digital agencies that didn't have the depth of knowledge in specific social channels.

Caroline Dangson, research analyst at IDC, says she expects to see additional acquisitions in the social space. (For his part, Strout says it's not even the end of acquisitions for Powered, hinting at a potential move toward creative-design companies or even in search engine optimization.)

"We're realizing that the technology is really important, but it's the easiest part of this equation," Dangson says. How companies implement, deploy, get support for, and promote user adoption are where the real challenges lie. "These technologies have broad capabilities, but there's also a lot of confusion in the market," she says. "We're in [a] period of experimentation." Nevertheless, Powered's acquisitions and others like it will certainly help move this space forward, she says, adding that companies are taking a more serious, metrics-based look at social media this year, with a better sense of the results they want.

From a technical perspective, the greatest challenge still to overcome is the integration of data into a customer management system. Inevitably, companies will have to find a way to link information coming from networks and communities into their CRM solutions in order to create a well-rounded view of the customer and to develop meaningful interactions. "People don't really know what they're supposed to be measuring yet," Strout says. "You can collect any kind of data but if you can't do anything meaningful with it, you're dead in the water."

While Strout says we may see this level of sophistication as early as 2011, Dangson says she's skeptical about that maturity's pervasiveness. "It's going to be tough," Dangson says. "It isn't just plugging [a solution] in. This is about culture and making sure all departments are aligned in the strategy. That stuff needs to be figured out and that's going to take some time."

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

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