WPP Takes Stake In Percolate, Expands Social Marketing Efforts

Still trying to perfect its social media strategy, WPP’s digital investment arm has taken a minority stake in social marketing firm Percolate.
Percolate helps brands create content that is “on message” and more likely to get traction across social media channels. 
“We’re focused on the creation aspect, and [serve as] a system of record for brands,” Noah Brier, cofounder and CEO of Percolate, said on Wednesday.
With the pact, WPP will also help New York-based Percolate expand domestically and abroad. As the WPP deal is non-exclusive, Percolate plans to continue working with other agencies outside of the company’s network. Percolate clients include Ford, General Electric, and Unilever.
This is hardly WPP’s first foray into social marketing. The company famously made about $50 million on its $5 million stake in Buddy Media, after the Facebook marketing platform was sold to Salesforce.com in 2012.
Just last month, WPP’s Data Alliance unit tapped social analytics startup DataSift to help its agencies -- including GroupM, Wunderman, Kantar, JWT and Cohn & Wolfe -- access social data from various platforms, including Twitter, Tumblr and Facebook.
WPP was also recently rumored to be eyeing social media analytics startup Simplify360. The Bangalore-based firm already boasts about 100 clients, including Revlon, Target and Yamaha.
The social-marketing business is bigger than ever. This year, advertisers are expected to pump nearly $12 billion into social networks around the world, according to eMarketer. That’s 25% more than marketers spent on social last year.
Analysts, however, say the social management market is ripe for consolidation. In fact, over the next 24 months, the number of social-leaning vendors and agencies will shrink from roughly 200 to less than 24, according to Mukul Krishna, digital media industry analyst at Frost & Sullivan.
“Consolidation is definitely needed -- and definitely happening,” Krishna recently told Social Media & Marketing Daily. “The market is extremely fragmented, and filled with vendors and agencies promising to manage everything, which is B.S.”

WPP Digital agencies include Blue State Digital, POSSIBLE, Rockfish, and F.biz in Brazil, while its technology units include Acceleration, Hogarth and Salmon.
At the group level, digital revenues exceeded $5 billion in 2012, and represented 33% of total group revenues of $16.5 billion. Over the next five years, WPP has targeted at least 40% to 45% of revenues coming from high-growth markets and new media.
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