Dive Brief:

• WPP has acquired enterprise solutions provider Satalia, which uses machine learning and optimization to improve operational efficiency at companies, per an announcement. Financial terms of the transaction were not disclosed.
• U.K.-based Satalia, which employs more than 80 people across Europe, is integrating with Wunderman Thompson Commerce as the consultancy looks to strengthen its technology offer. Satalia CEO and founder Daniel Hulme will join WPP as Chief AI Officer, working alongside Chief Technology Officer Stephan Pretorius.
• As AI chief, Hulme is tasked with shaping WPP's artificial intelligence strategy, including research and development, ethics, partnerships, talent and products. The deal is part of an accelerated M&A strategy at WPP that's centered on building out specialties in areas like commerce and technology.

Dive Insight:

The Satalia buy supports Wunderman Thompson Commerce's internal operations while also bringing on a new executive who will oversee broader AI initiatives at the world's largest ad holding group. The unit will act as "a hub of AI expertise" for all WPP shops, the announcement said.

Founded in 2008, Satalia is predominantly known in the U.K. and has worked with clients including Unilever, Tesco and PwC. Along with offering consultative services, it has built AI products like Satalia Workforce and Satalia Delivery. The former automates and optimizes the allocation of employees while the latter is focused on supply chain logistics, such as planning delivery routes and scheduling fleets. Satalia previously helped Tesco, the British grocer, iron out its last-mile delivery solution.

Pairing Satalia with Wunderman Thompson Commerce comes as marketers, particularly retailers and packaged goods brands, shift more of their business online due to the coronavirus pandemic. E-commerce carries high expectations around the customer experience but is also a frequently embattled channel with a lot of moving parts. Supply chain disruptions have loomed large over the past year and are expected to intensify with the busy holiday period in the months ahead.

The deal squares with how WPP is investing in end-to-end technology solutions that can provide more holistic services to clients. Traditional agencies, previously tech laggards, have been hitting the gas on transformation as they face stiffer competition from global management consultancies and contend with marketers in-housing more of their work. M&A has become a larger part of that journey as revenue growth returns with a rebound to the larger ad market.

WPP reported like-for-like net revenue, a key measure of health, increased 19% in the second quarter, per a recent earnings statement. Net revenue in 2021's first half was up 9.8% compared to the year-ago period, with growth recorded across categories and most major markets. Discussing the results with analysts, CEO Mark Read said that the group sees "good-sized opportunities" for mergers and acquisitions in the near future, particularly related to e-commerce, marketing technology and data and analytics.