Hearst boosts marketing strength with iCrossing acquisition
The agency will be part of Hearst Marketing Services, a new business unit led by Matthew Petersen, SVP at Hearst Magazines. Peterson joined the agency in March from Meredith Integrated Marketing, which made a series of investments during his tenure to strengthen digital capabilities.
“Hearst has been looking to build out into the marketing services space with a concentration on digital for some time,” Peterson said. “We were looking for a more holistic set of services to get into this area, and we see a lot of ways to leverage iCrossing's capabilities and expertise across Hearst's client and agency partners.”
The media company created Hearst Marketing Services when it completed the acquisition. To date, iCrossing is the unit's lone entity, although growth is expected, said Peterson.
The Wall Street Journal first reported April 19 that Hearst was close to a deal to buy the agency. On June 2, the newspaper reported that Hearst bought iCrossing for $325 million.
Peterson added that the acquisition will complement Hearst's traditional media offerings, rather than supplement bottom-line revenue that may have been lost by consumers' migration from traditional print to digital media. He said he could not comment on how circulation or list revenues fit into the deal or Hearst's strategy.
“Traditional media been rebounding quite nicely and print properties here are doing well,” he explained. “We're looking at this acquisition as a complementary, adjacent business that dovetails nicely and can be optimized for clients, both existing and new.”
ICrossing executives will continue in their present roles, Hearst said June 2 in a statement announcing the acquisition. The agency will retain its branding.
Hearst approached iCrossing last fall with an unsolicited bid, and a deal was worked out in ensuing months, said Don Scales, president and CEO of iCrossing.
“Traditional businesses are being challenged, so it's logical they'd look toward digital, and the trend of publishers getting into the space ought to continue,” Scales said.
“Given the complexity of rolling out a new campaign or enhancing a company's branding, it makes sense for traditional media companies to acquire interactive marketing firms that will improve customer experience,” said Adam Gross, CMO of The Jordan, Edmiston Group, which served as Hearst's exclusive financial adviser for the transaction.
Petersen stressed iCrossing will remain a standalone business unit, and its digital capabilities and expertise will not be instituted across Hearst brands until such opportunities arise. Likewise, Hearst partners and iCrossing clients would not be “force-fed” one another's services until opportunities to cross-sell present themselves, he added.
ICrossing clients include Coca-Cola, Bank of America, Epson and Toyota. The agency has nine offices in the US, two in the UK and one in Germany.