Mirroring a trend in the advertising and direct marketing industry, Internet marketing agency CKS Group, Cupertino, CA, and Internet consulting company USWeb Corp., Santa Clara, CA, have merged to bring specialized technical and creative Internet capabilities under one roof.
Under the terms of the agreement, all outstanding shares and options of CKS Group stock will be exchanged at a ratio of 1.5 shares of USWeb stock to 1 share of CKS Group stock. The resulting company will be called Reinvent Communications Inc. Mark Kvamme, chairman/CEO of CKS Group, will become chairman of the new company. Joe Firmage, chairman/CEO of USWeb, will serve as Reinvent's CEO.
USWeb's Internet consulting services include creating Internet information systems that connect to companies' databases, building e-commerce engines and working on the back end of internal corporate communications. CKS Group focuses on marketing services such as product branding, Internet development and database architecture.
Company executives describe the merger as a combination of the right brain and the left brain.
“They are very technical, linear, process-oriented, and we are creative and focus on finding different marketing programs to solve companies' marketing problems,” Kvamme said. “We want to create a company that is central minded.”
The management team created for the new company includes a mix of people from CKS Group and USWeb. In addition, management has created nine integrated teams in areas such as human resources and sales to ensure that the new company will include elements of CKS and USWeb. The new company will approach prospective clients with technology and marketing personnel, weighted toward one side or the other depending on a client's needs, Kvamme said.
The companies have a similar customer base with only an 8 percent overlap. They have never collaborated, but they have previously competed for client work.
Reinvent will target large companies, particularly those in rapidly changing industries such as financial services, technology, telecommunications and “any industry where the Internet economy has a dramatic effect on business,” Kvamme said.
In general advertising and direct marketing, there have been increasing discussions this year about marketing and consulting practices moving closer together.
Examples of direct marketing agencies that have begun to incorporate consulting practices into their business include Wunderman Cato Johnson, which merged with Capital Consulting and Research in May when the latter company was acquired by WCJ's parent, Young & Rubicam; and Rapp Collins, which along with its parent, Omnicom Group, formed a healthcare consultancy that will include marketers from Rapp Collins and other Omnicom agencies.