Look at the number of acquisitions announced this month and last in the marketing and media space. Is this summer or what?
Let’s take a count. Valassis will buy Advo to create a multibillion-dollar coupons-to-mail giant. Printer Quad/Graphics bought a majority interest in mail services firm Openfirst. Legal and real estate publisher ALM acquired Strategic Research Institute, a conference and seminar producer. United Business Media digested Commonwealth Business Media. Private equity giant Carlyle Group took a controlling interest in gift and novelties cataloger Oriental Trading Co.
On the interactive side, DoubleClick Inc. bought Web video specialist Klipmart Corp., and private equity firm Milestone Partners gained a stake in nutritional supplements retailer Bodybuilding.com.
The big agencies found the money, too. WPP Group’s Wunderman purchased interactive agency Zaaz, and its GroupM Interaction unit bagged online word-of-mouth firm M80. Also, Omnicom Group acquired interactive shop EVB.
These transactions, and others not mentioned, were announced June through last week. So what does this furious activity during supposedly somnolent summer say about media and marketing?
For one, the big are getting bigger – not out of ego, but need. Valassis needs to diversify into broader mail services as its coupon business comes under increasing pressure from declining newspaper circulation. Advo is the answer, though Wall Street doesn’t think so. But then Wall Street has always been too short-term in its thinking.
Quad/Graphics’ play for Openfirst is again seemingly a diversification move. The printing business is scale-driven and increasingly commoditized. Smaller printers find it hard to compete for major accounts when larger competitors have an edge in technology, paper- and ink-buying influence and bundled offerings.
At the same time, printers of all sizes realize that marketers are looking to the Internet and other channels for marketing communications and commerce. So it makes sense for Quad/Graphics to expand its footprint from mainly catalogs and magazines to printing for the automotive, retail, insurance and financial services markets – Openfirst’s bailiwick.
What about ALM and United Business Media’s purchases? Events, in a word. Advertisers today look to link their print and online buys with the handshake. Experiential marketing is essential to opening doors and closing deals. But events are tricky. Advertisers must make ad or sponsorship buys only when conference organizers submit attendance numbers audited by BPA Worldwide and the Audit Bureau of Circulations. That’s the criterion used for buying print ads. What is sauce for the goose is sauce for the gander.
As for the big agencies, well, their attitude to consumer-friendly innovations – search, e-mail, rich media, you name it – has always been consistent. Let the smaller interactive shops develop the technology, educate the marketplace, acquire clients, duke it out with competitors, gain fame and then get too big for their boots – or run out of money. Step in, White Knight.
