DG Sizes Down And Rebrands As Sizmek

sizmekDigital Generation Inc. (DG) will officially rebrand as digital marketing solutions provider Sizmek on Friday.

The shakeup follows the $485 million sale of DG’s television ads distribution business to competitor Extreme Reach, announced last August, approved by DG shareholders Monday and which CEO Neil Nguyen expects to close Friday morning.

The sale is important because it will allow debt-plagued DG to emerge as debt-free Sizmek, said Andrew Bloom, the company’s SVP of strategic business development. It gives Sizmek the opportunity to present what Bloom described as “a whole refresh on [the company’s] strategy.” The divestiture of DG’s television ads distribution business enables Sizmek to turn itself into “a pure-play digital public company.”

Achieving these aspirations means consolidating the technology assets Sizmek had acquired over the years when it was DG: a campaign-management and ad-serving stack from MediaMind, semantic and contextual data tools for programmatic solutions from Peer39, rich media from Unicast and EyeWonder and the ability to push rich media into Facebook and Twitter from Republic.

“The Sizmek platform has every single component of the DG and MediaMind stack in one platform,” Bloom said. “That’s critical.” Sizmek hopes this combination will amplify the original MediaMind technology, which Nguyen described as “the largest independent ad server in the world not owned by a publisher. We collect all the clicks, all the metrics, when we serve the ad to the consumer.” 

Sizmek’s strategy entails four areas: optimizing media, optimizing the context in which an ad appears, building out an effective creative message and ensuring the right audience sees it at the right time. What hobbles many clients in achieving this, Bloom said, are issues around audience fragmentation and the ability to figure out a siloed industry filled with different point solutions.

Sizmek intends for its unified stack to alleviate this headache. “Holding company leadership sees us as helping drive innovation in a number of areas where they don’t have to deal with a bunch of ad-tech companies to execute a campaign,” Nguyen said.

But if this narrative sounds vaguely familiar, one needs to look no further than ValueClick’s Monday rebrand as Conversant.

“It’s basically the same story,” said Forrester Research principal analyst Jim Nail. “[Sizmek/DG] had a collection of point solutions that were historically sold separately.” (Bloom pointed out that its different technologies, though unified, will still be available a la carte.)

It’s easy to see why Sizmek’s strategy makes sense. For marketers fatigued by the complexity of the current digital vendor landscape, getting an end-to-end marketing stack can be sweet relief – though there’s an ongoing debate as to whether a suite can be good in everything marketers and advertisers need.

But now that Sizmek is entering the world of consolidated digital marketing solutions, it faces a tough fight going forward, Nail said. Specifically, Sizmek risks becoming yet another suite solutions provider in what Nail described as “a very crowded space with some big players putting together a bunch of past point solutions, integrating them into a single platform and making this same pitch. It’s a tough space to stand out and really differentiate.”

The heavy hitter in the room? Adobe, which has the advantage of legacy (comparatively speaking of course – the marketing cloud concept is still in its infancy) as well as a powerful and recognizable name. How then can companies like Sizmek or Conversant compete?

“They’re going to have to maintain some of the entrepreneurial innovative spirit that those point solution companies were about,” Nail said. “What I hear about Adobe is people feel they’re big and slow and promote functionalities before they’re fully baked. But Adobe is the IBM of the space. Nobody gets fired for working with a company of that name and presence. So it’s one of those stories of being fleeter of foot than your big competition, who by virtue of their bulk will roll up a significant share of the market.”

Nguyen, however, doesn’t see this as an issue, pointing out that the marketing clouds created by Adobe and Salesforce.com are huge, and that advertising, where Sizmek plays, is only the front end of that overall marketing experience, one that includes media, creative and CRM.

“[Advertising] isn’t the entire customer management experience,” Nguyen said. “[Sizmek is] an execution leader inside that ecosystem.”

But no matter where these newly consolidated companies exist within the marketing ecosystem, they will be judged chiefly based on their ability to execute on their promises. Nail acknowledged the difficulties of this: Juggling different technologies is tough, and it’s also tough to maintain the cutting edge as new tools emerge, even as the base platform needs to be maintained and run on an ongoing basis.

These challenges likely won’t keep other vendors from consolidating their tools and rebranding (and further crowding the competitive landscape for suite solutions). That two happened in one week is a sign of things to come, Nail said.

“I anticipate we’ll see a lot more this year,” he said, predicting five or six more “in relatively short order.”

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