Merger mania kicked off some months ago, when top-three attribution vendor Visual IQ was rumored to have hired a banker to shop itself around. The company put together a pitch deck (a "book" in investment parlance) and embarked on a roadshow with prospective buyers. Since then, its two top rivals have been acquired – Convertro by AOL and Adometry by Google – but Visual IQ has not.
And the bake-offs continue.
The latest to be snatched up is DC Storm, a company focused on cross-channel attribution paired with consulting services. Its buyer, Rakuten Marketing, has been on something of a shopping spree for technologies to supplement its cornerstone affiliate marketing acquisition, Linkshare. In 2013 it bought retargeter MediaForge, PopShops and video site Viki.
It seems DC Storm relies on a high-touch approach – more human than algorithmic – to assign incremental value to media touch points along the customer path to purchase. Its CEO Seth Richardson said in a statement today, "Instead of relying on black box algorithms or machine learning, we combined deep analytics and expertise to present data in meaningful ways that clients can easily understand."
DC Storm's abilities are not unlike Visual IQ, according to some sources, which employs as many as 11 data scientists and other staff for each account. The downside of a highly consultative approach, from the standpoint of would-be acquirers, is that it doesn't scale easily. Visual IQ is based in Needham, MA, with many employees based in India. It has a relatively high headcount, and Internet technology giants that have looked under the hood may be wary of its service-centric model or of a post-sale employee exodus that could reduce its service-driven value proposition.
On the other hand, when Google bought Adometry it explicitly called out its "white glove" approach with customers, so a focus on managed services that struggle to scale may not be totally detrimental from an acquirer's point of view. For comparison, Adometry employs roughly 130, Convertro about 60 and Visual IQ about 190.
Multiple sources have confirmed that the current wave of consolidation in the attribution space seems to have kicked off when VisualIQ began courting strategic buyers. This gesture led many interested Internet players to peek under the hood at several others, leading to their eventual sales. AOL bought Convertro for $101 million and Google paid a rumored $150 million for Adometry. Both deals were announced on the same day.
"Everyone has gotten the call about VisualIQ," one investment banker told AdExchanger recently.
That Visual IQ's key rivals have seen exits, perhaps directly as a result of its search for a buyer, is a painful irony certainly not lost on the company's management. Remaining competitors in the space include C3 Metrics, DataSong and Encore Metrics.
After its acquisition by Rakuten, all DC Storm employees based in the UK, US and Germany will be retained, and its Brighton, England, headquarters maintained. Rakuten's digital marketing suite now includes affiliate marketing, retargeting, search marketing and commerce-oriented product feeds. Terms of the deal weren't disclosed.
As AdExchanger's Kelly Liyakasa reported recently, technology developed by attribution companies overlaps to some extent with companies in other categories. Therefore the buzz around attribution can be seen as an extension of other recent DMP acquisitions, including Neustar's 2013 purchase of Aggregate Knowledge and Oracle's acquisition of BlueKai.
“I see a complete collision course with data-management platforms, tag-management systems and attribution companies,” said Forrester analyst Tina Moffett. “If you think about (all of the data) they’re collecting, they can build advanced, sophisticated analytics on top of it.”
Correction: An earlier version stated Visual IQ is based in India. It's headquarters is in Needham, MA.
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