Less than two months ago, their agency specializing in email marketing was acquired by the well-established Responsys in an undisclosed cash-and-equity arrangement. Smith-Harmon, founded six years ago, has annual revenues of about $2 million.
The deal gives Responsys, which has a focus on the technology backbone of email marketing, access to Smith-Harmonâ€™s acclaimed creative and design capabilities. Both are expanding into cross-channel communications, looking to help clients with integrated campaigns that can include email, social media and mobile marketing.
"Their creative services are such a big positive that it's sort of a halo effect for us," Dan Springer, CEO of Responsys, told ClickZ in October.
Smith and Harmon, co-principals at their Seattle-based agency, will now oversee a joint creative services unit with about 40 employees. The deal melds 15 Responsys staffers in San Francisco, New York and Chicago, with Smith-Harmonâ€™s 25 in Seattle.
Smith-Harmon will keep its name (for now), though be known as â€œA Responsys Company.â€ It will remain in Seattle.
Executives Smith and Harmon will continue as principals of Smith-Harmon, but take on the added titles at Responsys as director, creative technologies (Smith) and director, creative services (Harmon).
They will report to Ed Henrich, vice president of professional services at Responsys, which has been around since 1998 in Silicon Valley. It does not report detailed financial results.
Smith said in an interview at the Insider Summit that Responsys approached his company several months before the late-October acquisition.
He said he felt the deal was â€œnot so much to win new business, but to provide the best creative services in the industry to existing clients.â€
Smith and Harmon moderated a panel on testing email campaigns at the Summit and said the pair are operating the company under new ownership â€œthe same way we managed our own company.â€
The firms share a run of clients, including Williams-Sonoma, Verizon Wireless, Orbitz and Disney.
Smith-Harmon started as a general digital marketing operation doing Web site design and other services six years ago. A â€œmini-Razorfish,â€ Smith said.
But four years ago, it began to zero in on email marketing as a core competency, believing it was an untapped market. They figured Harmonâ€™s creative, copywriting and design skills matched with Smithâ€™s technical and execution expertise would allow for a smooth transition.
â€œWe saw that it was an under-served market,â€ Smith said. â€œThere was nobody saying this is our specialty.â€
Smith and Harmon are married. Before launching their firm, Smith was a senior software developer in finance, working on foreign exchange systems. Harmon, with a creative arts degree from Columbia, did design and other work for retailers.
At the Summit, Smith said he of course appreciated the run of congratulations, but felt a â€œlittle bittersweetâ€ about it. For years, Smith-Harmon has worked with executives at companies that rival Responsys, and those relationships -- at least in part -- might no longer be as strong.