Yahoo’s announcement that it is acquiring data management platform interclick for $270 million comes amid a wave of ad tech deals, which are mostly centered on building up larger advertising and publishing companies’ social and behavioral analytics. It’s become increasingly clear, as this acquisition shows, that when it comes to online advertising, data is king.
In just the past 24 hours, Adobe (NSDQ: ADBE) has bought Auditude, social content distributor Clearspring purchased social data provider XGraph and online ad marketplace operator Adknowledge has bought AdParlor, a Facebook Ads management platform.
Yahoo’s acquisition is somewhat surprising, given the perception of turmoil surrounding the company, which saw CEO Carol Bartz unceremoniously ousted two months ago while trying to remake its ad sales team as Facebook and Google (NSDQ: GOOG) take an increasing share of display ad dollars. In the meantime, Yahoo (NSDQ: YHOO) may be exploring a sale of itself or parts of the company.
In essence, DMPs have been all the rage this year (last year, it was “DSPs,” or demand-side platforms, a tool for helping ad agencies and marketers navigate real-time bidding environments). DMPs, as the name indicates, help manage and provide understanding of third-party audience and pricing data related to online ad inventory.
As audience buying, as opposed to buying directly from publishers, who have traditionally proffered their brands as a proxy for audience gathering, DMPs become much more important. Especially since publishers and advertisers are practically drowning in all kinds of data and otherwise have great difficulty in bringing all the information they have together in a coherent, actionable form.
One of the major problems large sites like Yahoo have to contend with is “data leakage” or “data scraping” by outside ad networks and ad targeting firms. Over the past few years, scores of major publishers have sought to block remnant ad networks from their sites, often citing the lack of transparency and fear of driving down premium prices as the reason for closing the door. But it’s often hard to detect. Interclick can help Yahoo get a better sense of its data and where it’s being used.
Secondly, the hope is that interclick can help Yahoo better focus its sales performance generally.
“This investment underscores our focus on enhancing the performance of both our guaranteed and non-guaranteed display business across Yahoo and our partner sites and, combined with Yahoo!’s reach and advertising leadership, will deliver a powerful solution for marketers,” said Ross Levinsohn, EVP, Americas region, in a statement. “interclick’s innovative platform will allow Yahoo! to expand its targeting and data capabilities to deliver campaigns with stronger performance metrics.”
As I was told earlier by Clearspring CEO Ramsey McGrory, who happened to run Yahoo’s ad exchange platform Right Media until he joined Clearspring last month, the current online ad landscape bears a great deal of similarity to 2007, a period of frenzied M&A activity that produced a wave of consolidation: Publicis acquired Digitas (at the end of 2006, to be specific), Google bought DoubleClick, WPP bought 24/7 Real Media, Microsoft had bought aQuantive and AdECN, among many others.
Recent deals that reflect the wave of ad tech consolidation include the merger between ad buying platforms Mediabank and Donovan into a new entity called MediaOcean, comScore’s purchase of analytics provider AdXpose like the creation of a remnant ad sales consortium among AOL, Yahoo and MSN.
In its recent survey (PDF) of Q3’s media industry deals, the The Jordan, Edmiston Group, Inc. found that the marketing and interactive services area is the most the most active in both number of deals and deal value. JEGI counted 212 deals with a total value of $8.8 billion for the first nine months of the year. That’s an 18 percent and 24 percent rise, respectively, year-over-year. And there’s every reason that as the economy becomes more uncertain, and marketers demands for greater ROI grows as well, the still-fragmented landscape of online ad tech companies and tools will continue to drive those numbers higher.