M&A deals tell different online stories
It's a pretty fair bet that in the time that elapses between writing this editorial (Thursday night) and it appearing in Monday's DM News, there will have been another major acquisition in the online space - unless, of course, the adage about things happening in threes is actually true.
First came AOL's acquisition of Tacoda, the behavioral-advertising firm, last Tuesday. Then on Thursday R.H. Donnelley Corp. snapped up Business.com, the business search engine, directory and pay-per-click advertising network. That same afternoon, news came through of Microsoft's acquisition of Web ad exchange AdECN. All very different deals, but all pointing to the march toward digital consolidation.
The last deal is a pure media story: AdECN is all about efficiency in the ad-buying model, offering a transparent marketplace for advertisers to bid on inventory. But the first two are more creative buys. Donnelley gains access not only to what it describes as "highly qualified and motivated business decision makers," but also to Business.com's acclaimed performance-based advertising platform.
A Wired blogger also suggested that a major factor in the high price tag ($345 million, which reportedly is a high multiple of annual revenue) was the domain name itself. And it's worth pointing out that last week saw a survey by Opinion Research that revealed that 64 percent of Internet users bypass search engines and type keywords into their browsers with the hope of being directed to the right URL.
As for AOL's acquisition of Tacoda, that was not only proof that AOL is beefing up its advertising properties by snapping up another sexy independent, but it was also another sign that behavioral advertising is growing in popularity. And moves are underway to give it the scale that the experts - including Tacoda founder Dave Morgan himself - say it needs.
Behavioral targeting is typically more expensive than contextual targeting, but it's a great way for marketers to monetize Web sites that don't have a direct commercial capability. It's easy to overlook the relationship-building opportunities that exist online when you picture a consumer browsing from site to site. You can not only learn from the behaviors consumers display on your site, but you can also politely follow them around once they've left and, if done right, entice them back to your brand.
While a lot of marketers talk a big game about wanting to mobilize their brands online, many of them (especially those without e-commerce platforms) are looking at it in a fairly simplistic fashion - they're either finding ways of "doing ads" like they've always done, from display to viral, or they're looking at it from a purely tactical point of view through search and contextual buys. Behavioral targeting is a way to bridge the gap between tactical and strategic Web advertising, and it needs a more delicate touch than display- or search-based advertising. With platforms like Tacoda given the opportunity to spread their wings in the bigger environment that AOL can offer, we might see some really creative stuff happen. My eyes are peeled.