• Wall Street Journal, Wednesday, June 17, 2009 11:31 AM

In the example of industry consolidation, digital marketing firm Sapient Corp. is acquiring New York-based independent ad agency Nitro Group LLC. The transaction, a combination of cash and stock, is valued at about $50 million, The Wall Street Journal reports, citing a person close to the deal.

For several years, traditional advertising agencies have been buying up digital ad firms in an effort to grab some of the ad dollars flowing to the online sector. Now, the recession is forcing digital agencies to bulk up on traditional skills as marketers increasingly look to consolidate their accounts to save on costs.

"More and more digital firms are being asked to cover the traditional side by clients," Vidya Drego, a senior analyst at Forrester Research tells the Journal. Sapient, which designs Web sites and develops e-commerce capabilities for companies, has some "limited experience in the traditional space" but still needs to bolster its offering, according to Drego.

Sapient, which has about 5,900 employees and had revenue of $687 million last year, said it needed to move into the traditional ad market because it knows it could lose out on work.

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