Analyst Perspective: Omnicom and Communispace


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Omnicom Group announced on Wednesday that its Diversified Agency Services business has bought Communispace, a leader in the online customer communities space. An early pioneer, having launched in 1999, Communispace has created online communities for more than 100 major brands.

While the terms were undisclosed, we know that 2010 revenues were somewhere in the neighborhood of $40 million. And having last month conducted an analyst briefing with Jennifer Buatti, who deserves a lot of credit for having spearheaded Communispace’s new look and feel and who recently took the reins as VP, marketing, we also know that the vendor is continuing to enjoy a nice growth trajectory (as are a number of other vendors in this space) in 2011.

The acquisition makes a lot of sense. With Omnicom’s global resources at its disposal, Communispace will have the opportunity to not only expand operations but also better serve its clients, at least in theory, by providing access to a host of other capabilities across the parent company’s extensive portfolio of firms on the research, relationship management, interactive and branding sides as well as its full-service ad agencies. Omnicom, in turn, gains access to a recurring revenue stream from entrenched brands that have invested heavily in the caring and feeding of their online customer communities and, in most cases, aren’t about to try their luck with a different hosted platform.

A profile of Communispace is included in the Vendor Landscape section of the Gleansight benchmark report on Online Customer Communities. As the report notes, online customer communities can serve any number of purposes and must also, generally, adhere to the look and feel of the brand. This necessitates some degree of customization — which, again, also serves to guard against customer attrition.

To ensure the marketing, market research, customer support and other functions within the organization are able to meet their individual objectives, many solution providers are now building their platforms on a highly flexible widget-based framework or offering widgets that can be easily integrated into the underlying infrastructure. In this way, individual features can be selected and combined to form a more tailored and cohesive platform.

Another key trend involves the emergence of social networking integration features, which speaks to the value of connecting a brand’s private online community to the other social networking sites where consumers spend their time.

Republished with author's permission from original post.

Jeff Zabin
Jeff Zabin is research director at Starfleet Research, which benchmarks best practices in technology-enabled business initiatives, and CEO of Starfleet Media, the leading provider of content marketing programs tailored to meet the inbound marketing and lead generation needs of B2B companies in selected niche markets. A bestselling business author, he previously served as vice president and research fellow at Aberdeen Group.


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