Editor’s note: Salesforce captures opportunities across advertising, marketing and commerce, and a crash course with WPP may be imminent, says Technology Business Research Analyst Seth Ulinski.

HAMPTON, N.H. – WPP is taking a hit as brands transform business models to compete in a digital world and as platforms become the new agency retainer

The digital era is forcing enterprises to adjust the ways in which they engage with consumers, impacting advertising, marketing and commerce. WPP, the largest agency holding company in the world, with $70 billion in revenue and over 200,000 employees, is experiencing a trifecta of headwinds as clients reduce spend on marketing services, consolidate agency rosters and initiate zero-sum budgeting programs.

Facebook (Nasdaq: FB), Google (Nasdaq: GOOG) and Amazon (Nasdaq: AMZN) are encroaching on WPP’s legacy media-buying services, offering a combination of advertising inventory and self-serve interfaces (i.e., advertising technology [ad tech]) to plan and execute campaigns.

Per WPP CEO Sir Martin Sorrell, this increasingly sets the stage for “frenemy” status for each. Digital ad and ad tech — areas in which WPP competes with pure play agency Mindshare and ad tech vendor Xaxis — represent $200 billion and $32 billion markets, respectively, in 2017.

Fast-growing digital practices of IT services firms will only exacerbate WPP’s struggles

In addition to the headwinds discussed above, IT services peers such as Accenture (NYSE: ACN), Deloitte and IBM (NYSE: IBM) are siphoning business from WPP, largely via digital transformation projects but also by acquiring digital and creative boutiques.

Sorrell has continually stated competition from these technology and data-savvy services players is minimal; however, TBR believes the interactive arms of these global IT services firms played a hand in WPP updating 2017 forecasted net sales growth from 2% in first quarter to 1% in second quarter.

Salesforce captures opportunities across advertising, marketing and commerce; a crash course with WPP may be imminent

As brands look to deliver timelier, relevant messaging via digital platforms and SaaS delivery models, Salesforce continues to bolster its customer experience (CX) suite. In 2016 the company spent a combined $3.5 billion for Demandware, a commerce platform, and Krux, a data management platform (DMP). TBR believes integration of these tools into Salesforce Commerce and Salesforce Marketing Cloud is going smoothly and fueled revenue growth of 36% year-to-year to $317 million. The acquisition of Krux extends Salesforce’s footprint in the digital ad ecosystem, and while it does not encroach on meaningful business from WPP today, the CRM juggernaut’s appetite for acquiring key vendors does not appear to be waning. A complement to the newly acquired DMP functionality would be an omnichannel ad-buying vendor, or demand-side platform (DSP).

Given exits of key vendors such as Turn and Rocket Fuel, remaining players such as The Trade Desk (Nasdaq: TTD), MediaMath and DataXu could become acquisition targets; however, with The Trade Desk’s market cap of $2 billion, TBR believes one of the independents would be a more likely target.

As enterprise SaaS adoption accelerates and business functions converge via platforms, the legacy media buying of WPP is under pressure. While Salesforce is not a major player in the digital ad landscape, like Google or Adobe (Nasdaq: ADBE), programmatic advertising or that which is automated through software will make up nearly 60% of ad spend in the U.S. in 2017.

Given operational and media efficiencies, as well as business intelligence DSPs provide, programmatic advertising is a logical extension of CX tech vendors — as software eats the world, Salesforce remains hungry.