http:\/\/shankman.com\/i-will-never-hire-a-social-media-expert-and-neither-should-you\/<\/a>) where he noted the similarities between the original dot com furor and our new fascination with social media.\u00a0 Back then, numerous agencies popped up with names like Scient, Viant and Agency.com.\u00a0 Many of them got acquired, at astronomical (and in retrospect, insane) valuations; a few exist in quasi-independent status to this day.<\/p>\nWe\u2019re now seeing a similar frenzy in the social media space.\u00a0 From big acquisitions like Salesforce.com\u2019s acquisition of social media monitoring powerhouse Radian6 and Microsoft\u2019s acquisition of social platform company Yammer all the way down to acquisitions like this one, there\u2019s a feeding frenzy to acquire social media skills and market presence.\u00a0 Unfortunately, most of these deals are focused on the latter: companies who were slow to react to the explosive growth of social media are now buying their way into the market.\u00a0 Ultimately, those kinds of acquisitions may bring along a few clients but the ability to scale the acquisition, or even retain the existing client base, is questionable at best.\u00a0 These kinds of acquisitions simply don\u2019t scale, the skills of the people acquired are of great variability (and the better ones are often the first to go), the IP acquired is scanty at best and the integration into the acquiring company is often problematic.<\/p>\n
Reason for Optimism<\/span><\/strong><\/p>\nAgainst this largely negative view, we actually believe PwC\u2019s acquisition of Ant\u2019s Eye View stands to be better than most.\u00a0 What differentiates AEV?<\/p>\n
\n- The founders are very well-regarded practitioners, with a passionate belief in the transformative nature of social media.\u00a0 This is not just a company chasing the next hula hoop.<\/li>\n
- From the beginning, the founders had a vision of building a big company that was able to deliver against the transformative vision.\u00a0 CEO Sean O\u2019Driscoll called it a BHAG: \u201cbig, hairy audacious goal.\u201d<\/li>\n
- AEV has built a roster of top-level practitioners.\u00a0 They didn\u2019t want a bunch of self-proclaimed \u201csocial gurus.\u201d\u00a0 They focused on people who had practical experience at top brands (and often brought those brands along as clients).\u00a0 We\u2019re familiar with some of their people and have spoken with people familiar with the firm\u2019s efforts and there is universal praise.\u00a0 These guys are good.<\/li>\n
- AEV approaches this deal with eyes wide open.\u00a0 This isn\u2019t a deal for the AEV founders to cash out while the cashing\u2019s good.\u00a0 Instead, they have a significant understanding of the growth opportunities PwC affords them, opportunities that they just wouldn\u2019t have had given their own organic growth plans.<\/li>\n<\/ul>\n
Concerns and Caveats<\/span><\/strong><\/p>\nDespite all this, there are numerous caveats in any acquisition like this.<\/p>\n
\n- This doesn\u2019t dramatically change PwC\u2019s \u201csocial chops.\u201d\u00a0 With specialized expertise like this, there\u2019s no easy way to build this out into a broader PwC capability.\u00a0 The acquisition will certainly give AEV greater reach but their ability to scale with the scope of the opportunity just doesn\u2019t exist; they can\u2019t answer every PwC partner\u2019s call. If they push too hard, it could actually hurt<\/em> their value proposition.\u00a0 That said, our discussions with O\u2019Driscoll indicate not only an awareness of this risk but a strong belief that the business can<\/em> scale and that PwC will facilitate that growth..<\/li>\n
- O\u2019Driscoll talks proudly about AEV\u2019s focus on culture from the beginning.\u00a0 In his blog post announcing the acquisition, O\u2019Driscoll writes \u201cWe have a lot to be proud of, but perhaps what I\u2019m most proud of isn\u2019t the work we did, but the way we did our work. We created a culture and environment that inspired us. We knew right away that in order to hire the best people, we needed to be the best place to work. Culture wasn\u2019t an accident at Ant\u2019s Eye View, we co-developed it as a team and it\u2019s resulted in bonds that will have a lasting impact on all of us.\u201d\u00a0 What happens when that vision meets PwC\u2019s enormity? Promises of autonomy and representations of understanding of the unique cultural environment last until the first missed quarter or deadline or change in management.\u00a0 Fortunately, both sides are going into this with solid understandings and insights.\u00a0 For instance, O\u2019Driscoll talked candidly about talking to many potential suitors, most of whom he walked away from because of poor cultural fit, particularly in the advertising\/agency space.\u00a0 And in our conversation, PwC Advisory Partner Tom Puthiyamadam voiced all the right things about PwC\u2019s support for the AEV approach and culture.<\/li>\n<\/ul>\n
Key Takeaways<\/span><\/strong><\/p>\nIn summary, while we look askance at many acquisitions in the social media space, PwC\u2019s acquisition of Ant\u2019s Eye View is better than most.\u00a0 AEV is a well-regarded firm with more experience and intellectual rigor than we typically see.\u00a0 If PwC was going to acquire anyone, they really couldn\u2019t have done much better than this, and AEV seems to have done its diligence in selecting an acquirer.\u00a0 Time will tell how effective PWC is in opening doors for AEV to its clients’ CMOs and whether AEV’s distinctive culture, to so critical to its success, can survive in a big consultancy known for its risk-averse culture and accounting legacy. If you\u2019re a PwC client looking for an agency to help develop a social strategy, I\u2019d get in the AEV queue quickly (after, of course, talking with HfS).<\/p>\n
We are obviously fervent believers in the impact social will have on wide swaths of how we\u2019ll do business in the future.\u00a0 It is beyond the scope of this document to convince you of that imperative.\u00a0 If you\u2019re not a believer, well, you\u2019re probably not reading at this point anyhow.<\/p>\n
HfS Recommendations for Buyers of Social Media Solutions<\/span><\/strong><\/p>\nIt will take some time for AEV to scale up with PwC\u2019s reach, resources and capabilities.\u00a0 In the interim, if you can\u2019t get onto AEV\u2019s list of current engagements, you should look at their approach to this business when you evaluate other potential provider partners.<\/p>\n
\n- Focus on practitioners with real-world experience as opposed to self-appointed social gurus<\/li>\n
- Deep industry\/vertical knowledge.\u00a0 Regulatory considerations among many other factors make it such that one-size-fits-all approaches do not<\/em> work.<\/li>\n
- Focus on process and frameworks.\u00a0 While we\u2019re still in the very early stage of the evolution of thinking around social business, it\u2019s not so early that you can\u2019t look for emerging structure.\u00a0 Providers with real IP and processes are likely to provide more durable value than those who merely exist for \u201cImagineering.\u201d<\/li>\n<\/ul>\n
HfS Recommendations for Service Providers<\/span><\/strong><\/p>\n