SapientNitro Posts 11% Q3 Revenue Gain, Buys Second Story
Marketing services and consulting company Sapient reported a 10% revenue gain in the third quarter to $288.4 million on an 11.4% profit gain to $32.8 million. The company said its digital agency SapientNitro accounted for about 68% of total revenues or a little more than $196 million, up about 11% from the third quarter of 2011.
On a conference call with analysts and investors Wednesday, Sapient CEO Alan Herrick indicated that SapientNitro’s organic revenue growth for the third quarter was in the 8% range. The agency’s ORG for the first nine months of the year was not disclosed.
The company also said today that its digital shop SapientNitro acquired Second Story, the interactive content studio. The company positioned the acquisition as a move that strengthens the agency’s “ability to redefine storytelling for today’s always-on consumer by crafting experiences that seamlessly blend physical and digital environments from Web and mobile to in-store and in-venue.”
Second Story’s co-founders Julie Beeler and Brad Johnson will become part of the agency’s Global Experience Innovation team. Exact terms of the deal were not disclosed, but on the earnings call Sapient executives said that about $500,000 was being budgeted in the fourth quarter for the Second Story acquisition.
Herrick described SapientNitro’s revenue increase in the quarter as good -- “but not the exceptional growth we’d had in the last couple of years” where the shop had been delivering gains in some cases in the 30% range.
That said, Herrick stressed that the company believes that SapientNitro has a huge opportunity going forward to capitalize on shifting marketer dynamics as companies focus more on building consumer experiences via owned media. Given the impact of technology on marketing in the digital era, he said, CMOs are controlling a greater portion of IT budgets as well as marketing dollars as companies “shift their thinking and spending to more connected brand story telling” that requires a shift to “omni-channel business models.”
In addition to basic marketing services, said Herrick, helping clients build those owned-media channels as well as helping them create e-commerce platforms are opportunities for SapientNitro going forward. Short-term issues, he said, include the unstable economic environment as well as pressure on the client side as they sort out how to budget for and create “always on” marketing models in ways that best serve their unique businesses.