Social Consolidation Accelerates To Challenge Traditional DSPs

shiftbuyAs consumers increase time spent on social channels, the data on those platforms is becoming increasingly valuable to advertisers.

In its 2014 year-end report, Pew Research found that 52% of adults in the US use two or more social media sites, up from 42% in 2013. And though user growth on the leading social platform, Facebook, has slowed, engagement has increased.

Brand Networks, a social marketing and ad software provider, is focused exclusively on social platforms, and CEO Jamie Tedford said that affords it a competitive edge over traditional DSPs.

“We feel there’s a real differentiator by coming at it from a social perspective versus thinking about it like the traditional DSPs, who are adding social but not necessarily in a deep way,” he said. “Where we add value is to focus on the delivery of relevant content at every point. Relevancy is a result; the process is having better data integrations and better analytics.”

Brand Networks shelled out $50 million in cash and stocks to acquire SHIFT late last week, in a deal that speaks to consolidation in the social media advertising space.

“We’re watching the cloud wars closely,” said Tedford, pointing to IBM’s recent integrations with Facebook and Twitter, and to similar social strategies popping up via integrations and acquisitions by Salesforce, Oracle and Adobe.

“There’s a lot of movement there and a lot of interest in not just social, but in the data behind it,” Tedford said. “The integrations we see at that level are really about having visibility into the entire customer journey, and that starts and ends with data.”

SHIFT, a cross-network social ad platform, has raised $14 million, according to CrunchBase.

With SHIFT, Brand Networks has a headcount of 250 in offices around the globe, and SHIFT chief James Borow will step into his new role as Brand Networks’ chief product officer. The combined firm now manages more than $500 million in social ad spend for nearly 650 brands and agencies, among those IPG, WPP, American Express, AT&T and Unilver.

The acquisition gives Brand Network access to RelevanceRank, newly announced tech developed at SHIFT. RelevanceRank was built to help marketers boost the effectiveness of social marketing campaigns through tools that measure and predict the performance of paid and organic content.

Under the hood, RelevanceRank offers a set of algorithms that score each piece of content – paid, earned or owned – across Facebook, Twitter and LinkedIn.

“The purpose of the score is to help [marketers] understand how content will perform if it’s in a paid environment and, if it becomes an ad, to help marketers understand if they should increase their budgets to increase ROI,” explained Borow.

“You’ll see us roll out additional relevance-related products over the course of the year,” he added.

Brand Networks and SHIFT both began as Facebook PMD firms but have since expanded to Twitter and LinkedIn. The buy is Brand Networks’ second major social acquisition, following its $35 million Optimal buy some 18 months ago.

“That was a recognition at the time that, while we were one of eight strategic preferred marketing developers for Facebook, everything that wasn’t paid media was becoming less important on the platform from our perspective and from our customers’ perspective,” Tedford said.

For context, that acquisition coincided with Facebook’s plummeting organic reach, the decline of which sent some marketers scrambling to other platforms. And as more social platforms make their APIs available, Brand Networks will also look to expand its portfolio.

“If a social network is available for a brand to market on, we’ll have to be there,” Borow said. “You’ll see us expand into other networks. It could be Pinterest or Snapchat, or something that doesn’t exist yet.”

Asked to react to the acquisition, Jan Rezab, CEO of Socialbakers, a social media analytics and publishing company, predicted more of these types of deals on the horizon.

“The industry is going to continue consolidating,” Rezab said. “I believe most of the ads-focused Facebook Marketing Partners are going to either disappear or be bought if they’re not providing additional value and capabilities.”

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