DG President Nguyen Discusses Acquisition Of Rich Media Firm EyeWonder

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DG Buys EyeWonderYesterday, rich media ad tech firm Eyewonder was acquired by DG (formerly DG Fastchannel) for $66 million from Limelight Networks. Read the release.

DG President & COO Neil Nguyen discussed the implications of the transaction with AdExchanger.com.

AdExchanger.com: You have Unicast, MediaMind (formerly Eyeblaster) and now Eyewonder under one roof.  What do you think that says about rich media? Or does it say more about what DG is doing?

NN: It's a combination. I think as a company, clearly, we believe that we need to build an independent digital media services company at scale. So you have the big boys above us, and I would never profess to say that we compete at all directly with [companies like] Google who have so many services, but clearly what we want to do is provide a good, solid alternative for the industry.

On the DG side, I think for the last three years we've been talking about our digital strategy. At first, we went to Unicast and then a fantastic platform and organization in MediaMind.

Now we make a definitive and an effective statement about our commitment to the digital industry as a whole by adding EyeWonder and building a very sizable digital business for the industry. But the combination of both companies creates a lot of competitive differentiation in the market. You have a thriving and robust TV business - in essence it's an offline business. And now we have a digital business that's at scale. So with that we're going to be able to innovate and bring more solutions sets from the platform.

The early feedback I've gotten from agencies is that they like the move, because for them  they have to work for Google, and there's not a lot of big digital companies out there that people are comfortable with, "Am I going to make an investment with my technology and partner in a small company" - or do they find the right partner that they believe can be sustainable?

I think that's the key thing. We've demonstrated to the industry that we're going to do on a pro‑forma basis $424 million dollars in digital media revenue. I don't think there's another company out there, excluding the Microsofts and the digital titans - I think we're probably one of the larger ones out there.

Looking at EyeWonder right now, what would you say? Is this acquisition more about clients or tech?

What EyeWonder is really known for is their world‑class customer service. I'm not saying that MediaMind didn't have any, but in North America, which is the concentration of EyeWonder business, they're well known for being a high touch, service organization. And we find great value with that, in combination with what we believe is a very scalable, and in my humble opinion, one of the better third‑party platforms in the industry.

So you have these assets together with the complementary business of what Unicast brings, which is our publisher‑side solution.

With EyeWonder, there is technology there, but I would say, it’s about customer relationships, and the fantastic service and operations employees that they have.

How do you view the international opportunity in digital for DG?

EyeWonder brings a certain key geographical market. 72% of MediaMind's revenue is international. So they're already established globally in these markets.

I think in the world of digital media, you have to be a global platform. There's no geographical barrier for media anymore, especially from an advertiser's standpoint.

I think we have assets in key markets that are growing much faster than the rest of the world. Like down in Latin America and APAC. Those markets are growing rapidly.

Let me ask you about the EyeWonder executive team and John Vincent. What are the plans there?

John is staying on board until the end of the year. He's going to move into a strategic advisory role to me. I met John three or four years ago. He's been supportive of this, and I think if you talk to him he'll have nothing but positive things to say. He thinks it's a great place for this company to have a future and for his employees to have an opportunity to grow and expand their career path inside the company.

And about the EyeWonder employees, are there plans to fully integrate them? Is there going to be some sort of overlap?

Clearly there are always going to be some redundancies in any acquisition that you do. What we shared with the MediaMind folks, and for the 14 acquisitions we've done at DG in the six years that I've been here, we take a merit‑based approach which is the fact that every position is up for debate based on the person's capability.

If you get to know our company a little better, you look at the different folks within our organization,  and it is literally cross‑pollinated with leadership and management and people from every company [we’ve acquired].

The EyeWonder staff brings a lot of talent, and we're looking forward to adding that talent base into our pool. But clearly know there are going to be redundancies in certain areas, and that's just part of the integration process.

Can you see additional acquisitions? Are you done?

As a public company I can't really comment on that. I think we have a lot of key pieces. And overnight we've added almost 700 employees in the last 60 days. So I think the focus has got to be about execution, which we're always focused on.

People are starting to realize that DG has had a plan for a long time. It wasn't something we hatched up 12 months ago. This started with a dual strategy and a long‑range plan that we put together three or four years ago.

The combination of our DG business and our digital business gives us the toolset to build what everybody's been talking about for a decade, which is the convergence of media.

Final question.. given all of your acquisitions, what would you say are some of the keys to successful integrations?

In having done enough of them to speak with a bit of credibility, I think what we do is focus on the customer. And at the same time, we've become open and transparent to our employee base across both companies, the existing one and the new one that it's about to be merged into.

And you take an approach, like we said, that we run a merit‑based organization and stick to that philosophy - that people will be treated with respect and communication will be open, and that we really do believe in getting the very best talent for any available position that we have in the company. And the actions have to follow those words.

The only way you're going to be able to make an acquisition and integration successful is to retain your best talent, keep your customers, and drive the business forward from there.

But, it really starts with executing on and following through on the words that people use in every opening speech of every company. And I think what they've seen and they get into the company and it's reinforced by...

We have companies that we bought six or seven years ago and the founders are still here. That's pretty amazing to me. They're still here running the business, when they've exited the business, because they still believe and buy into the vision. You have a process that really allows you to respect the knowledge base and the core competencies in the new company, while you educate and really adopt the best practice, with the keen eye that it has to fit to your strategy.

By John Ebbert

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