Here’s the Press Release announcing the acquisition.
And here’s a bit of background. It’s certainly no secret that my goal for Semphonic has been to build the leading digital analytics consultancy in the U.S. It’s also clear that we’re at a critical inflection point in our industry. The consulting environment has been almost ridiculously fractured and dominated, to some extent, by small boutique companies like Semphonic. Yet our clients are demanding ever larger scale, more projects, more comprehensive digital measurement coverage, and more advanced technologies. In a big-data digital analytics world, the days of the Mom-and-Pop are clearly numbered. Digital has become an integral part of the enterprise marketing world; for many enterprises it’s the single most common customer touchpoint and often the most important.
Digital has grown up, and it’s time digital measurement did too.
2012 was a spectacularly successful year at Semphonic. By far our best year ever. We registered something like 70% growth in every important metric to a consulting business. That’s exhilarating, but it’s scary too. Managing growth can be even trickier (though not nearly as depressing) as managing contraction. I’ve done both and I know. But it also made clear to me how great the opportunity is around digital analytics and how little of that opportunity Semphonic could hope to capture.
So the decision to seek an acquisition wasn’t one we made lightly and it wasn’t driven by need. It was a conscious decision made with deliberation and carefully executed. We hired an M&A firm (ClearSight Advisors) and began a process of talking to potential partners. We talked to every sort of company – from interactive agencies to database marketing companies to technology companies to…E&Y. We ended up with almost two handfuls of offers. But in the end, it seemed to me that E&Y was the perfect fit.
E&Y provides massive scale, an aggressively growing advisory practice, the opportunity for Semphonic to come over intact and be THE Digital Analytics Center of Excellence, a company that’s not seeking to own creative or platform in digital – just measurement and performance – and a true people-driven business. We get world-class HR, recruiting, training and IT capabilities - all fundamental to fueling growth in our business. We get the ability to integrate with a much larger team of enterprise analytics specialties across everything from Supply Chain to Health Care analytics. We get the opportunity to work from the top of the enterprise down to drive measurement across the entire spectrum of digital. We stay in the same tool-neutral, customer-centric solution world-view that has always driven Semphonic and that I believe is fundamental to effective measurement.
As I look at the landscape for digital analytics consulting, I see technology vendors who provide, at best, capable support around tool-specific implementations and tactical usage. I see interactive agencies providing fairly sophisticated media analytics (though only in support of their own buying) but little in the way of deep site or customer analytics and who simply can’t engage around broader customer problems or across the spectrum of customer experience. I see boutiques that spun up in the Web analytics world and are struggling to even stay relevant in the more sophisticated world of big data and real analysis. And I see large traditional practices that can provide scale and professional consulting but lack any coherent digital methodology or depth.
At Semphonic, we’ve fueled our growth largely by junior hires and training. It’s a slower path than body-shopping, but it creates a practice with a stronger culture and a more coherent practice. I think we’ve gotten pretty good at this – taking smart people who haven’t done digital analytics and giving them the chops, the methods, and the ways of thinking that drive world-class digital analytics. From VoC to Big Data to Enterprise Reporting to Site Analytics to Customer Data Models, there’s a clear, strong, deeply considered point-of-view here that’s backed by a wealth of hands-on practice experience.
In short, I think our practice within E&Y can provide
something completely unique in the analytics landscape. Something deeply
interesting and valuable. Fold a practice with a deep understanding of digital
analytics and the best methods in the industry into a company with the ability
to scale across entire enterprise digital programs and deliver all the
management, resources, and professionalism necessary to drive very-large
engagements, and I think you have something absolutely transformative. Something that will shake up and change the entire digital measurement industry.