We asked a selection of ad industry participants their views on the following question:
"What are the implications of yesterday's acquisition of Mediamind by DG?"
Click below or scroll down for more:
- Atul Patel, CEO, OneScreen
- Bill Day, CEO, Tremor Video
- Dave Morgan, CEO, Simulmedia
- Will Margiloff, CEO, IgnitionOne
- Mitchell Weinstein, VP, Director of Ad Operations, Universal McCann
- Darren Herman, Chief Digital Media Officer, The Media Kitchen, kbs+p
- Alan Pearlstein, CEO, Cross Pixel Media
- Amir Ashkenazi, CEO & Founder, Adap.tv
Atul Patel, CEO, OneScreen
"DG's acquisition of MediaMind shows the clear path to the convergence between traditional broadcast and online advertising and content businesses. Companies that streamline and scale digital media with real technology will drive future consolidation."
Bill Day, CEO, Tremor Video
"The MediaMind acquisition is a strong indicator of the digital video channel's emergence. People talk about 40 percent year-over-year growth, but they don't know where that growth will come from. The only way we're going to get there is through technologies that can scale, and that's what this acquisition is about.
This acquisition is another positive indicator of the importance of digital media within the overall advertising ecosystem. When a multinational corporation with a long history of powerful advertising distribution makes such a large investment in a new channel, it shows traditional advertisers are serious about moving their budgets into digital. MediaMind has been an innovator and pioneer in this business, and the acquisition validates many tenants of digital marketing, including the importance of strong ad creative and the necessity of consumer choice when it comes to engagement. Multiplatform consumption will continue to change the media business, and companies with strong technology solutions will rule the day."
Dave Morgan, CEO, Simulmedia
"DG buying Mediamind makes a lot of sense to me. DG manages a lot of the "plumbing" in the delivery of ad creatives in TV. Mediamind is a leader in the delivery of rich media creatives online. Everyone expects that the online and TV ad worlds are going to get a lot closer over the next few years, so it sounds like DG wants to put more of its future destiny in its control today and its spending $400+ million to do it."
Will Margiloff, CEO, IgnitionOne
"The Digital Marketplace is full of feature companies. This combination brings together two platforms that may make for an interesting cross channel product with a heavy focus on Rich Media and Video Ads. Good scale, great Global footprint. The combination puts them on a much bigger stage in terms of larger technology solutions. This definitely adds more fuel to the fire about the technology consolidation wave that's happening in the industry. Recent acquisitions prove out the point that marketers are clamoring for more powerful, centralized solutions. The days of running multiple technologies across your site for various solutions and none of them learn from each other is coming to an end. Google and AdMeld, DG and MediaMind are just the beginning. If you are one feature on the technology landscape slide, then you should get the 'For Sale' sign out and quick."
Mitchell Weinstein, VP, Director of Ad Operations, Universal McCann
"MediaMind's recent branding change and realignment to focus on full service ad serving, reflects a growing need in the industry. The business of serving digital media has become incredibly complicated (overly complicated in many cases). Ad serving companies need to become more full service, instead of focusing on a single aspect of media such as Rich, Video, or Mobile. Whoever can do this, and convince advertisers that they can do it well, seeks to gain a lot of business. DG is betting that MediaMind, combined with its other holdings, will meet this need."
Darren Herman, Chief Digital Media Officer, The Media Kitchen, kbs+p
"Let me start by saying that prior to 9AM yesterday morning, I was a MediaMind shareholder. It was actually one of the larger positions in my portfolio. Waking up to a 38% premium was certainly a sweet way to wake up.
DG Fastchannel came out of left field for me, probably because I wasn't overly aware of them. However, now I am and I think it was a smart move for DG - at least for what I know of them by reading their website. They now have Unicast and Eyeblaster under the same umbrella, access to a growing trading platform (built on top of AppNexus and possibly others) which could service Springboard and their other agencies, and a robust ad serving solution which will service the entire DG network. For $414MM in cash, I believe they received a lot.
3 months ending gross profit was $17MM (March '11), so that times four is around $68MM (not accounting for seasonality). That's around 6x, which is undervalued, IMHO.
I couldn't be happier for Gal, Andrew, and the rest of the MediaMind team and look forward to what the future holds. As an agency who uses the MediaMind platform to service my clients, I'm interested in hearing what might change."
Alan Pearlstein, CEO, Cross Pixel Media
"We've seen two notable purchases of independent companies in recent days, both pointing to a land grab on the part of the acquirers in what are undisputedly growing segments. Google acquired AdMeld for its mature publisher relationships as they assert their dominance in display - especially automated display - as they have in search. And DG Fast Channel acquired MediaMind for its agency and advertiser relationships, particularly outside the U.S. It's important to remember that DG Fast Channel already owns Unicast, so the MediaMind acquisition is complementary and efficiency-gaining, much like the AdMeld acquisition is for Google is nearly one year after their Invite Media purchase. Both acquired companies have great technology, but many others in our space do too. Terry Kawaja's logo slide is depicting an ecosystem in which there are many pieces, some of which MIGHT fit together. Both AdMeld and MediaMind enjoyed core technology differentiation in their segments that we're all aware of. But, in both cases, the core differentiation that their acquirers sought was the relationships. There's a clear lesson there for many in our business who churn more clients and partners than they should. These multi-billion dollar companies who have built their fortunes on technology and machine learning are buying relationships."
Amir Ashkenazi, CEO & Founder, Adap.tv
"This is an important signal that the traditional media platform companies are recognizing the increasing need to support all facets of the media plan. Video is increasingly delivered and consumed via IP and the advertising platforms needed to support this shift are inherently in the realm of digital companies."
By John Ebbert