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So after months of rumor it is finally confirmed that Publicis Groupe will buy Razorfish. The terms of the deal are widely reported and the benefits to Publicis Group seem to make this deal a sound choice. This deal will put presumably put Razorfish into the Publicis’ VivaKi unit and I expect they will retain their own agency brand. It has been suggested that after this deal, Publicis will generate 25% of the Group’s revenue from digital. This would be signifiacntly larger percentage from digital that the other 4A majors.

As part of the deal, the two companies will enter into a five-year strategic alliance that will allow Publicis-owned agencies to buy display and search advertising from Microsoft on “favorable terms” in exchange for a guarantee that Publicis will buy a certain amount of ad volume. Also as part of the deal, Razorfish will remain a preferred provider of digital strategy and creative and experiential marketing services to Microsoft. The marketer will guarantee a minimum amount of spending with Razorfish each year of the agreement.

In terms of China, I am not expecting any major changes to the 4A landscape as Razorfish does not have any significant presence and the Vivaki unit is still forming. There maybe some discussion in the halls of UM who holds the MS account about what this means to one of their key accounts but in the short term I think very little.

If you have some thoughts on this then please drop a comment below…