Deals



Merkle Acquires LiveArea In $250m Deal In Pivot Towards Commerce


Posted: 7th July 2021 09:37

Merkle, the data powerhouse within Dentsu International, announced today that it has made a deal to acquire LiveArea, a commerce and customer experience agency based in Dallas. Here’s what you need to know about the announcement.

What Happened

Merkle has inked a deal with LiveArea reportedly worth $250m. Under the new agreement, LiveArea’s 590 employees will join Dentsu’s Merkle. Merkle has been positioning itself as “a leading data-driven customer experience management." Merkle says the acquisition “bolsters Merkle’s global experience and commerce capabilities and furthers Merkle’s position as a go to experience partner for businesses around the world,” per a statement. Indeed, the deal could help Dentsu Group achieve its previously stated goal of generating 50% of its revenue from customer transformation and technology.

LiveArea’s roster of clients include key industry players such as Salesforce, SAP and Adobe. The acquisition will likely enable Merkle — and Dentsu at large — to deepen these relationships.

LiveArea’s leadership team will report directly to Pete Stein, global lead for Experience and Commerce at Merkle. Stein joined from Huge in September. He was replaced by IPG Chairman Mat Baxter. The transaction is expected to close in Q3 of this year.

Why It Matters

The acquisition aims to help Merkle strengthen its commerce capabilities — a focus that is more timely than ever. During the pandemic, ecommerce boomed; in 2020, consumers spent over $861bn with US merchants online — representing a 44% YoY spike. Even if growth plateaus, it’s clear that investment in retail commerce (and ecommerce in particular) will be beneficial to the firm.

While a recent Financial Times story painted a gloomy picture for Dentsu, as the advertising giant suffers Covid-induced revenue declines and faces major hurdles to reaching Olympic success, the company's Q1 earnings indicate that Merkle continues to serve as a valuable component of the business. Dentsu’s North American business reported a Q1 organic revenue drop of 3.8%, but the company noted that “Merkle in particular remains well positioned to see a significant pick up in revenues in FY2021 as clients increasingly focus on first party data combined with robust ecommerce and D2C strategies.”

“The acquisition of LiveArea is an important part of the future of the Merkle/CXM business, allowing us to enhance and expand our experience and commerce business and compete at the highest levels,” Craig Dempster, Merkle’s global chief executive tells The Drum. “In the future, all digital touchpoints will be shoppable, and all shopping experiences will be digitally-enabled. As such, it's important to have commerce at the heart of our customer experience transformation capabilities, and the acquisition of LiveArea underscores and augments our capabilities in these key areas.”


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