Bain & Company is set to acquire digital marketing agency FRWD after several years of successful collaboration. The acquisition fits into Bain’s strategy of building out its digital marketing offerings, helping clients maximize their marketing reach and effectiveness by integrating consumer data into clients’ broader marketing strategies. And there may be more acquisitions on the horizon for Bain, hints Elizabeth Spaulding, co-head of Bain’s digital practice. Consulting sat down with Spaulding to talk about the acquisition, how FRWD fits into Bain’s overall strategy, and how marketing is changing to keep pace with shifting consumer behavior.
Consulting: Can you tell us how the FRWD acquisition came to be?
Spaulding: We’ve been teaming up with them for about three years and we’ve just seen really tremendous results. The acquisition resulted from a few things, the first is very like-minded cultures in terms of driving very hands-on impact with our clients and really being able to see demonstrative results. The second is this is just a whole new area of change as a result of digital and technology that we’re just observing as super important for our clients who are marketers, more broadly those participating in commerce platforms, and it’s no longer sufficient to advise and identify the opportunity but in fact help our clients really convert these ideas into hands-on capabilities and results. What FRWD brings to the table were some assets we didn’t have internally that we felt were very additive to the kind of work we were doing with clients. We see the space continuing to expand, really just a broad disruption of the traditional agency model, one where we think more and more our clients are going to need to be building the analytics and execution capability within their in-house team. Through acquiring FRWD our plan is to scale that capability further across our regions, which will help us assist our clients through this major transition they’re experiencing.
Consulting: What are some of the biggest challenges emerging from that transition?
Spaulding: One kind of meta-level point is consumers are migrating so quickly it’s a challenge to keep up with that shift. We’re all checking our phones a few hundred times a day, consumers are moving away from ad-supported TV and traditional media, and that shift continues to accelerate. I think there’s one big challenge, which is really embracing and building the capabilities needed to operate on a mobile-first, digital-first world as a marketer. That might mean launching creative weekly if not daily versus on an annual calendar basis with a agency. It means linking all the customer data being used in digital channels to how you’re doing your own 1-1 marketing within a loyalty program and how you’re connecting with that audience on an ad platform like Facebook. That’s a whole host of new skills for a lot of traditional marketers. Digital natives have grown up building those teams in house, but a lot of big marketers have relied on an ecosystem of third parties and we just see this transition that because consumers are moving so quickly to these new channels and because platforms are constantly launching new product features, whether it’s Stories going live in Instagram or commerce being integrated into some of these platforms. It’s just moving at such a pace you need more of this capability set in-house. So it’s this whole reinvention of the media mix but also really the skillset to be able to move at the pace that’s necessary which means a more hands-on model.
Consulting: Was the acquisition primarily a capabilities play? A talent play? What was the key driver?
Spaulding: I definitely think it was a capability play, enhancing and expanding our capabilities. I think we’ve always prided ourselves on best-in-class analytics, the expansion of our data science team is a huge priority for the firm right now. I think our belief has always been that business impact driven by the best insights and analytics in the world is a big part of what we do. In the realm of customer acquisition, marketing, retention, customer lifetime value, being best-in-class on new media platforms and with digital technology is a must-have. This really allowed us to catapult and accelerate our capabilities, some of which we had built in house but we recognized we wanted to move a lot faster, combined with the belief this was a really like-minded culture. If that hadn’t been the case it might not have been the right fit for us.
Consulting: How common is an acquisition like this for Bain?
Spaulding: Working with third parties and having very close partnerships is increasingly coming to be part of our model, and we’re seeing more and more also of the hybrid talent model of really deep hands-on experts together with our team. I think the acquisition element is new. This is the first that we’ve done a capability play. My guess would be you’ll be seeing more of this from us.
Consulting: Does this acquisition represent a shift for Bain in its digital marketing strategy?
Spaulding: I don’t think the idea of bringing in new capabilities is a shift in strategy, i think in terms of the speed we want to move at in order to get the capabilities fast enough might be newer for us. Kind of recognizing which of these partners are so close to the core of what we want to do and be able to deliver to our clients. The team brought a great group of practitioners that are fluent and fast in platforms, we immediately get a really talented team as well as additional analytics horsepower.