It can be argued that no company represented the expansion and evolution of the role and practice of demand generation more than DemandGen International. Over the past decade, the company has been credited with helping a prestigious list of B2B brands apply the methods and technologies for driving growth, including disciplines for successful lead nurturing, lead scoring, ABM and other key demand generation programs. Therefore, it was of significant note last week when DemandGen International announced it had signed a definitive agreement to join forces with BDO Digital, a subsidiary of BDO USA, that helps middle market and enterprise organizations harness innovation and capture the full power of technology to drive growth.
Coming during a flurry of M&A activity in the B2B agency space, the pairing is of particular interest as it brings together DemandGen’s unique expertise in digital marketing consulting services with BDO Digital’s deep reach with mid-market and enterprise companies.
To learn more about the merger, Demand Gen Report sat down with David Lewis, Founder and CEO of DemandGen, to discuss how this combination will expand and enhance DemandGen’s capabilities, the primary factors driving merger and acquisition growth and the overall future of the entire DemandGen team.
Demand Gen Report: Your company helped shape the category of demand generation, and I’m assuming you have been approached for mergers or acquisitions in the past. Why did you decide that now was the right time for the deal? How did this come together?
David Lewis: One of DemandGen’s guiding principles is growth; we’ve always been committed to growing the business. We’ve done that organically for the past 13 and a half years, but for the last several, we realized that we needed a much bigger platform to have the impact that we want on our clients and marketing in general.
What we’re finding is that the complexity of our clients’ marketing and sales operations is growing. They need a plethora of technologies to keep up, and they need to align internal teams. It was overwhelming and daunting for them, so we’ve been expanding our capabilities in consulting, technology services and managed services to support our clients. We needed to find a different way to grow and scale to support this massive demand.
DGR: Why was BDO an ideal partner? What did the search process look like?
Lewis: We had 200 companies respond with interest, and we cut that list down to 22. We had in-depth conversations with those 22 companies, and the majority were private equity companies that wanted to invest in growth and build a business, with a handful of strategics mixed in. And, candidly, when I received the tear sheet in advance of the meeting with BDO, I wondered why they were so interested in this space, because their business spanned 100 years and is really rooted in tax, audit and advisory services.
Taking our thriving business to the next level has been a top priority. We’ve been bringing on more and more global enterprise companies, and we’ve had to scale tremendously. So, we said, we can either go the private equity route or the strategic route. The reason we didn’t go the private equity route was because I wanted more than just investment — if we took investment by a third party, that leaves all the growth responsibility on us. That will probably end up in a private equity path taking the business we built and selling it to another third party; that’s traditionally how that path goes. That’s not the way we wanted to go, we wanted to find a true partner to help us scale in terms of services and team members overnight.
DGR: Mergers and acquisitions in general are hot right now in the agency space — what do you think is driving this spike in activity?
Lewis: I think two things are driving it. One is that Covid accelerated the digital transformation priority for every company; it was a wake-up call that the traditional ways that they go-to-market will no longer work. In fact, companies that had events as their main go-to immediately shut down. Companies had to make a fast pivot online.
Additionally, the buying process and the buyer’s journey was changing and empowering the buyer. We’ve always said that buyers make informed buying decisions before even talking to your sales teams. While this made every company aware that their sales team couldn’t meet people face to face, they needed a digital presence to engage with audiences.
Every business must rethink and retool how they go to market and since there is massive demand for the expertise and services to get them there, acquisitions enable market leaders to stay way out in front.
DGR: What do you think the merger will mean for the future of DemandGen’s offerings, as well as for your team? Do you anticipate expanding your offerings? Do you think most of the team will remain in place?
Lewis: Some of the areas we’re going to expand is our data services and expertise in governance and the legalities surrounding digital marketing. Digital sales are getting stronger and more complex, so governance is an important advisory service to help our clients ensure their data is secure and being used and managed in a legal way. We’ve been working on expanding our data services and joining BDO enables us to expand more rapidly because of their expertise in machine learning, AI and data management.
We’re also expanding our CRM capabilities with the addition of BDO Digital’s focus in Microsoft CRM. Most of our clients historically have used Salesforce, but we're seeing increasing growth in Microsoft CRM usage. Another area of service expansion is with the Adobe stack. Adobe has a wide range of digital tools, like Adobe Experience manager, so we have plans to dramatically expand our capabilities across the Adobe platforms.
DGR: What will your role look like going forward and how will the team integrate in to BDO Digital? Is your team coming with you?
Lewis: One thing I want to make clear is I’m staying on. I plan to retire at BDO Digital; I have no interest in or no plans of leaving their company or riding off into the sunset. My journey is not over. Again, one of the things that I really liked about BDO Digital is the opportunity to serve their U.S. and global clients. So many of these middle-market customers have not really gotten started on their journey. I’ll be leading the demand generation group within BDO Digital as a partner, and 100% of my team is coming over — no one is leaving, and there’s no restructuring.