Interpublic Group has acquired Salesforce solutions architect RafterOne as part of CEO Philippe Krakowsky’s strategy to grow the agency network’s data business and integrated commerce offering.
Terms of the deal were not disclosed.
RafterOne helps brands implement Salesforce solutions for B2B and B2C commerce. The Portsmouth, New Hampshire-based company is a Salesforce Summit Partner, which is the highest tier awarded to Salesforce implementation partners.
RafterOne was formed just four months ago from a merger of three businesses: Docmation, GearsCRM and PixelMedia. Each offered different specialties within Salesforce’s various clouds.
PixelMedia, a Salesforce-focused B2C commerce agency, sought to extend its capabilities after raising private equity funding from BV Investment Partners in January 2021. It joined forces with Docmation in April 2021 to add B2B capabilities to its offering. Salesforce injected an undisclosed sum into the combined company in June 2021 via its investment vehicle Salesforce Ventures. The final piece of the puzzle, GearsCRM, joined the firm in November 2021 to bring expertise in Sales Cloud, Service Cloud and integration software MuleSoft.
The new company was relaunched as RafterOne in June this year.
All of the founders remain with the business. PixelMedia cofounder and CEO Erik Dodier leads RafterOne as CEO, while his other cofounder Thomas Obrey leads B2C. GearsCRM founder Harry Radenberg leads Sales and Service Cloud; Docmation founders Jay Sappidi leads B2B, Vikram Datla is CTO and Prasad Pamidi is COO. They will continue in these roles following the acquisition by IPG.
RafterOne has 500 staffers in five offices in the U.S., Canada and India.
RafterOne will operate as a standalone entity under IPG. Cofounder Dodier told Campaign U.S. it wouldn’t make sense to merge RafterOne with another IPG agency because of its specialist focus. “If we can stay in our lane and focus on Salesforce, there's plenty of room for growth,” he said.
“At this point, there's no timeline on RafterOne going away, if ever,” Dodier added. He expects to integrate some back office functions with IPG eventually.
The company will closely partner IPG’s digital marketing agency MRM, which it already shares an undisclosed client with. MRM will offer RafterOne access to new clients in verticals such as auto and life sciences, as well as access to a broad set of capabilities in data, marketing, branding and optimization, Dodier said. RafterOne’s biggest clients are in retail, manufacturing and high-tech.
For IPG, RafterOne is a strategic bet for several reasons. The company will enhance IPG’s integrated commerce offering, grow its martech capabilities and provide another avenue to monetize data business Acxiom.
“On our earnings calls we often get asked about the overarching, broader approach to M&A and we've been pretty consistent that commerce is an area that we're interested in,” IPG CEO Philippe Krakowsky told Campaign US in an interview.
“We see few client engagements where e-commerce is not part of the brief. So clearly, we need to ensure that we have the wherewithal to incorporate it into our overall offering and to solve for it, because it's an area where clients are very focused.”
IPG is less acquisitive than some of its agency network peers, preferring to grow organically. When weighing up what capabilities to build, partner with or acquire, Krakowsky said he considers whether something is “core and central” to marketers’ digital transformation plans.
He believes Salesforce is core enough to warrant investment. Its tools form the foundation of many brand’s commerce operations, allowing them to manage everything from online sales to customer service to marketing. Meanwhile, e-commerce has boomed since the COVID pandemic, rising from 15% of global retail sales in 2019 to 22% this year, according to Morgan Stanley. It is expected to grow from a $3.3 trillion industry to $5.4 trillion by 2026.
“You have to have broad expertise across so many technologies and platforms, but among the primary ones you want to ensure that you've got the absolute best-in-class capabilities,” he said. “We're constantly reassessing whether something is becoming strategic and core enough that we feel it needs to be part of the offer, or whether it is something where we'll continue to be comfortable and successful just finding partners.”
Kate MacNevin, MRM chairwoman and CEO, said: “We’ve seen a huge surge in market demand around platforms like Salesforce because it brings the entire customer journey together on one platform.”
“Deep commerce capabilities and platform expertise have become core to how we build and engage audiences for our clients,” she added.
Both Krakowsky and Dodier see opportunity in using Acxiom’s data to power RafterOne’s solutions. Acxiom, which IPG acquired for $2.3 billion in 2018, was the holding company’s costliest bet, and it continues to look for ways to weave the data layer into its solutions.
This story first appeared on campaignlive.com.