Photo: BI / WPP
The most interesting thing about the recent acquisitions of Buddy Media (by Salesforce.com) and Vitrue (by Oracle) is who didn’t do the buying: The big Madison Avenue ad agency holding companies like WPP, Omnicom, Interpublic Group and Publicis.On paper, Buddy Media (which sells Facebook campaign management software) and Vitrue (social media customer relations management software) would be perfect fits inside these businesses. Indeed, WPP had a $5 million stake in Buddy Media.
About $1 billion in advertising is placed on Facebook every quarter alone. Clearly, social media is a huge area of growth for marketers and advertisers. There are plenty of other small social media marketing and advertising companies that could be snapped up by Madison Avenue—TBG Digital, TBG, AdParlor (and its parent AdKnowledge), Adaptly, Blinq Media, 22Squared etc. But they haven’t been.
Rather, two of the most significant and innovative social media marketing shops are now tucked into companies whose profile in the traditional advertising world is non-existent. Oracle is a sales software and customer support company; Salesforce.com is one of its main rivals. While both companies are huge in their fields, they’re known for handling the non-glamorous, nitty-gritty back-end of the marketing mix.
Suddenly they’re in charge of its sexy, leading edge.
Hold that thought …
Madison Avenue has a history of outliving new competition bent on destroying it. Every couple of years, someone comes along and announces that their new thing will kill off the agency business. The business press keeps declaring that “advertising is dead,” but revenues only keep on growing, year after year.
The holding companies may be playing the long game: There is no law that says the ad money rushing into social media will always increase. There are already huge questions hanging over the effectiveness of Facebook’s ads, for instance.
More importantly, Facebook, Pinterest and their like are improving their offerings for advertisers, giving them more measurement and dashboard tools, and generally making it easier for advertisers to do business on them: LinkedIn improved its targeted follower tools; Twitter improved its brand pages. Most smaller brands get along just fine without the need for publishing apps.
If Facebook’s dashboard tools start to approach the usefulness of those offered by Buddy Media, what’s the point of owning Buddy Media? And if Facebook wants to keep advertisers interested in it, won’t it make a lot of sense to do exactly that?
So this could go two ways: WPP et al. could come to regret not moving fast enough to snap up these companies. Or, if history is a guide, five years from now we’ll be talking about the naivety of non-advertising companies thinking they can get into the marketing business via a few simple (and expensive) acquisitions.
- WPP’s Buddy Media Deal Could Signal Era Of Consolidation In Facebook Ad Buying
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