A celebrated design firm that handles Apple and Nike snapped up a tech agency to compete with agency giants, and they claim a combined $90 million in revenue

• Design firm Work & Co, which counts Apple and Nike as clients, just snapped up data analytics agency Acknowledge as they try to compete with bigger agencies and consulting firms like R/GA and Accenture.
• The companies say they can offer more specialized services than the bigger players.
• Competition for digital ad budgets is heating up as consultancies buy specialty firms, though.
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Celebrated design and tech company Work & Co just acquired data and analytics firm Acknowledge to better compete with ad agencies like R/GA and consulting companies like Accenture.

Brooklyn-based, 6-year-old Work & Co has about 350 people in the US, Europe and Brazil, and creates websites, apps, ecommerce platforms, and other digital products for clients like Apple, Nike, IKEA, and Airbnb. It claimed almost $80 million in revenue in 2019, up 20% year-over-year. The deal is the second in six months for Work & Co, which just bought Tendigi, another design company that specializes in apps.

Acknowledge, started in 2012, has around 40 staffers and has Harry's, Vice, Goop, and A&E Networks as clients. It estimated its revenue at $8 million to $10 million the same year.

Agencies are competing to help clients design and track custom technologies

As more marketing dollars shift to digital, advertisers are looking for new ways to measure and improve their performance. Work & Co co-founder and partner of strategy Mohan Ramaswamy said his company can grow Acknowledge's data analytics, measurement, SEO, and media-buying work and offer broader services to clients.

Mid-sized agencies like Work & Co have an opportunity to help brands improve on or redesign their older digital products, said Jenny Friedler, who led the digital lab at Planned Parenthood when it was a client of Work & Co. and is now head of product for Vox Media.

But Work & Co faces growing competition from giants like Accenture, which has acquired several firms like search and programmatic specialists Storm Digital and app design agency Intrepid, to offer marketing services that do not involve traditional advertising.

In the first six weeks of 2020 alone, Accenture has acquired digital consultancy Silvio, data analytics provider Clarity Insights, and customer experience and commerce firm Maihiro.

Ramaswamy said Work & Co and Acknowledge can offer more specialized services than bigger companies, though. He said he wants to help clients with researching, developing, and distributing their apps and platforms.

Several other companies offered to buy Acknowledge, according to its founder

Acknowledge founder and CEO Toby Evers said the two companies had shared clients such as Twitter and Virgin Atlantic and grew comfortable with each other over the years.

Evers said he turned down acquisition offers from two big agencies, two VCs, and a big publisher before selling to Work & Co.

"Most of the time, it was 'How can we turn a bigger profit off of what you do?' and not 'How can what you do complement our business?'," he said.

Under the deal, whose conditions were not disclosed, Acknowledge becomes a standalone company under the Work & Co umbrella.

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