Smart Data, Insights Arms Race Has Agencies Vying for Analytics Firms

·4 min read

Excel Sports Management recently acquired Block Six Analytics (B6A), a data insights and partnership valuation company. In the past, it was more commonplace for established information, data and market measurement companies, like Nielsen and MarketCast Group, to absorb relatively smaller data analytics firms (see: Nielsen’s purchase of Repucom, MarketCast’s purchase of Turnkey Intelligence). But with the B6A deal, Excel becomes the latest sports and entertainment-focused agency to beef up its internal analytics, measurement and insight capabilities with an acquisition (investor/operator Bruin Capital did the same when it tucked IEG into Engine Shop and acquired Two Circles).

This growing trend is being driven by the “arms race for smart data and insights that drive decision-making,” Emilio Collins said. The Excel partner and chief business officer explained that brand clients are more and more looking “beyond the table stakes of exposure and impressions. They want to know how to generate more in-depth insights to understand overall impact on business.”

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Our Take: Historically speaking, in addition to any in-house capabilities an agency might have, they would align with a multitude of external measurement, research and insights providers. The belief was sourcing insights from a number of companies would lead the agency to the solutions that ultimately would work best for their clients.

But over the last three to five years, diversified agencies have found that partner and client asks have become increasingly data-oriented. “The marketing industry is quickly transitioning into a data-backed analytics model. Behind that is the emergence of new technologies that help brands understand very precisely how consumers interpret and act on the value proposition of their products and services,” Bruin Capital Partner David Abrutyn said.

As a result, B6A CEO Adam Grossman said that agencies without robust in-house capabilities are finding it has “become challenging to provide [some clients] with the full suite of solutions necessary to activate and create strategy—particularly around how and why [a partnership] is creating value.”

The other problem agencies have encountered with that approach was difficulty turning various insights into an actionable plan. “The goal of data science, measurement and research is to find patterns and insights in the data,” Grossman said. “Combining [a number] of different data sets to do the analysis is a difficult enough proposition, let alone to do the actual analysis and find the insights. And how do you really [weigh] all the different datasets coming in?”

By bringing B6A in-house, Excel can look to a single source for direction. The acquisition also gives the agency a unique approach and proprietary methodology to offer prospective brand clients. As Grossman explained, generally speaking, agencies are looking for “infrastructure, a point of view and to be differentiated in how they look at and evaluate partnerships and partnership assets.” It is hard to stand out when you are using the same or similar providers as everyone else.

Brand clients are asking about value creation more frequently because of the rising cost of sports partnerships and sponsorships. These assets have become some of the most visible—and thus, expensive—properties within marketing portfolios. “One of the things we’ve increasingly heard over the last two or three years is, ‘We have to present this [deal] to our finance team.’ We need an approach that speaks their language and also shows specifically how and why we’re getting a positive or negative ROI,” Grossman said.

Collins echoed: “No decision-maker is looking to make a decision that is not backed by some level of data and insights. And increasingly, they are looking to their agencies to provide that.”

The influx of data-savvy executives into C-suite positions in recent years would also seem to be a contributing factor. As would COVID-19. “The decisions being made around make-goods, sponsorship value and what happens when things aren’t activated” accelerated the need for data-backed insights, Grossman said, adding that brands “really needed to understand the value of the assets.”

While brand clients are after data-driven insights, Excel believes those same understandings can turbocharge their brand marketing and property representation businesses. On the brand marketing side, “the insights and data that we can gather from Block Six [will allow] us to holistically measure the performance of [client] portfolios and those assets,” Collins said. “And on the property side, it can inform the ways in which we go about targeting new prospects. A lot of the machine learning tools that we [gain] with Block Six can make us more targeted in our prospecting for companies for major assets” (think: naming rights opportunities).

To be clear, many major agencies have some amount of in-house data, analytics, measurement, research and insights expertise. Where Excel believes B6A will provide a leg up is in its ability to leverage emerging technology (like machine learning) and proprietary analytics to provide unique data sets across multiple channels and activation types.

With agencies leaning into data science, measurement and insight generation, B6A is unlikely to be the last data and/or analytics firm picked off. Navigate, MVP, Hookit, Blinkfire Analytics and GumGum are among similarly sized competitors that could be takeover targets. Granted, some have raised money at significant valuations, which could make an acquisition more difficult for an agency to pull off.

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