PhillyDeals: In shift, software firms buy digital ad firms

When software firms start buying marketing firms, you know something is changing in the way corporate America does business.

LiquidHub, the Wayne-based "systems integrator" that customizes business software for Novartis, Subaru, Comcast, Vanguard, and other big companies, plans to announce Wednesday that it has acquired Foundry9, a 100-person New York digital advertising and marketing agency that targets financial services companies.

It's the first acquisition for LiquidHub, founded in 2001 by Guyana native Jonathan Brassington and colleagues Robert Kelley and Leighton Yohannon.

LiquidHub has been expanding rapidly, especially since it raised $53 million from private investors in March. Since then, LiquidHub has added 600 technical and business people. The firm now employs 2,000, including 400 in the Philadelphia area, and expects sales of $150 million this year, Brassington says.

Foundry9, which employs 30 at its satellite office in the banking and credit-card center of Wilmington, is LiquidHub's first acquisition. More are in the works.

Why does a software firm need a marketing firm? Because software firms aren't just selling directly to other engineers in corporate information technology departments anymore, says Brassington.

Instead, "we're seeing this massive shift, where the chief marketing officer is becoming the buyer of much of the technology" that firms now use to locate and target consumers, he told me, citing studies from Gartner Group and Forrester Research.

This is the latest in a string of software/marketing mergers: Brassington noted that Cognizant, the Teaneck, N.J.-based info tech consulting company, this month acquired Cadient, the 140-person King of Prussia marketing agency specializing in drug and medical clients. IBM in May added Atlanta-based marketing-software maker Silverpop.

Digital ad agencies such as Foundry9 help arrange the targeted ad sales that have rapidly boosted sales and profits at Facebook and other social media companies, Brassington said.

Foundry9 is in the business of telling firms how to use consumer data from payment records, social media preferences, and other rich sources of consumer and client information. Then those companies can better target online advertising campaigns and offers to the people most likely to buy the firms' goods and services.

Integrators like LiquidHub help companies organize and prioritize information from these vast piles of data and make it useful to salespeople and other employees.

"Tactics come and go," and companies want advice for using the latest, said Foundry9 cofounder Matthew Bernardini, a Darby Borough native and Rutgers grad.

"If you're a marketer getting data through a call center or a sales-lead system, you're outside your usual comfort zone. We help with your strategy," Bernardini told me. With LiquidHub on hand to build software systems that can put Foundry9 strategies to work, both firms say they will profit.