2007’s libidinous mating season seems to have bred many baby aQuantives, and lately the news wires are chirping with M&A announcements from these hungry hatchlings.
One recent roll-up to peck through its shell is PV Media Group, which debuted last week under the wing of Chicago-based Bridge Investments with two acquisitions: an SEM agency, Prime Visibility, and an ad network, AdOn Network.
Steve Rosenberg, a seasoned broadcast studio exec who most recently led Universal Domestic Television, has signed on to lead the initiative as CEO. Under his guidance, the firm hopes to acquire additional companies in the digital marketing space. However Rosenberg and PV are so far mum on what channels it may move into next — other than to hint that profitability out of the gate is important.
Future service expansion “could mean growing organically, could mean partnering, could [mean] acquisition,” Rosenberg told ClickZ. “A key for us is finding companies that grow through their own entrepreneurship and make money on their own. They’re not waiting for that [next] wave to hit.”
King of Prussia, Penn.-based GSI Commerce is another firm using acquisitions to build out a digital marketing platter. The company has agreed to acquire e-mail marketer e-Dialog and has named digital marketing pioneer Nick Pahade to lead its online arm. More acquisitions are planned, though Pahade declined to elaborate on the company’s exact plans.
A third acquisitive start-up in the digital marketing services arena is Zeta Interactive, helmed by digital direct stalwart Al DiGuido. The firm was founded in September when private equity firm Investcorp Technology Partners bought e-mail marketer Zustek, then expanded in November with the acquisition of AdVerb Media of Boonton, NJ.
DiGuido, formerly CEO at Bigfoot Interactive and Epsilon Interactive, said Zeta is not immediately looking for new acquisition targets. Rather, he said the company’s big focus now is on integration and cross-selling.
“Saying you want to put this together, and then operationally putting it together and going out into the field are different things,” said DiGuido. “We’re trying to get operational issues under control. We’ve been doing a lot of training with our account planning and sales teams. The challenge is not necessarily… acquiring the assets.”
That sentiment was echoed by PV Media, which hopes its Prime Visibility SEO unit will bring new buyers to its AdOn ad network business. “They have hooks into companies that are a little deeper than a typical ad network might have,” said AdOn President Steve Armstrong.
PV Media also hopes being acquired by PV will allow the network to bid competitively for contracts, allowing it to take a short-term loss to secure big publisher relationships, according to Armstrong.
Will the flagging economy negatively impact the pace of digital marketing deals driving these firms growth? A December survey of 3,300 marketing services execs conducted by AdMedia Partners suggests it won’t. Of those polled, 67 percent said they expect to either approach another firm or be approached about an acquisition, and 39 percent expect to complete a deal either as a seller or a buyer. The findings were very close to those recorded a year ago by the firm.
Also interesting in the AdMedia Partners survey was a finding that specific expansion plans don’t necessarily match the highest-growth sectors of online marketing. Whereas 46 percent said they planned to “enter or expand” into the high-growth social marketing category and 38 percent had similar plans with regard to mobile marketing, fully 51 percent said they hoped to develop capabilities in Web development, a relatively low growth sector.
As this latest generation of merger-driven marketing services networks spreads its wings, it’s now clear the monster deals of last year didn’t signify any sort of end-game. On the contrary, small-scale acquisitions by firms with comparatively few resources have only picked up.
“If there’s a thought that it was kind of game over when Microsoft got together with aQuantive, that’s definitely not the case,” said DiGuido.
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