Ad tech companies floundering in the public markets have increasingly turned to private equity firms to reinvent their businesses away from the glare of Wall Street’s harsh spotlight.
Some PE firms buy ad tech to wring out costs before putting them back on the market or selling to another PE house. Others, like Sizmek, which acquired Rocket Fuel in July, buy point solutions and stitch them together in the hopes of providing a scaled alternative to the duopoly.
The latter scenario was the motivation behind Valassis Digital’s $95 million acquisition of ad network MaxPoint in August, said company President Cali Tran.
“We acquired MaxPoint to grow,” Tran said. “We are investing more capital and hiring more people.”
Traditionally a print media company that sends coupon books, postcards and direct mail promotions to consumers, Valassis, which is owned by Harland Clarke Holdings under PE firm MacAndrews and Forbes, launched its digital arm in 2013 to extend its view of the consumer into the digital world. But while Valassis had 40 years of experience reaching about 115 million US homes every week with its print products, its digital view of the consumer was limited.
“Prior to MaxPoint, we were sub-scale,” Tran said. “If we use the view of the consumer in the offline world to inform our targeting, we only see half of the consumer.”
With MaxPoint, Valassis gained a digital graph built out over 10 years that augmented its offline information with more than 1 billion digital profiles.
Six months post-acquisition, Valassis Digital works with 1,500 customers, from small and medium-sized businesses to large brands and agencies, to target consumers both online and offline. The company has grown from 150 to 500 people across 12 US offices.
Tran spoke with AdExchanger about the integration.
AdExchanger: What’s changed the most at Valassis Digital since the MaxPoint acquisition?
CALI TRAN: By having an integrated view of the consumer through their online and offline behaviors, we can do better targeting. With better targeting, we can send better media. When we talk about integrated media, it’s not just multiple digital media capabilities. It's a combination of print and digital working together.
What redundancies and synergies existed between your stack and MaxPoint’s?
Valassis was very comfortable understanding household behaviors. We could augment that with a digital profile within those homes, but we didn’t have a sense of the behavior of those consumers within those homes at the level of fidelity that MaxPoint had. Where Valassis had over 40 years of household behavioral data, MaxPoint had that for connected devices.
How do you collect data?
We buy a lot of data. We work with partners who own mobile apps, ad networks and exchanges and track the click stream. MaxPoint does that too, but we’re able to complement their approach with a more holistic, broader view.
Think about shopper marketing. We distribute coupons on behalf of CPG companies. We also help, through our sister company, NCH, with the redemption of those coupons. We’re able to show which coupons were sent to which homes and at which stores they bought those products.
By combining MaxPoint’s consumer graph with our redemption index, the fidelity of how we believe consumers acted on specific media grew. Now it’s not just about which household engaged with media. We can take it down to the device level within that household.
How far along is the integration?
The org design and technical integration is complete. We’re in our first quarter as a unified company. Our campaigns and targeting are all on one platform and all systems, tools and processes are complete. Our teams are still getting into the day-to-day experience of working with each other.
There’s no disruption in how we serve our customers. That was a big priority for us: Integrate quickly in the background and get to one unified platform.
What other synergies exist between Valassis Digital and the Harland Clarke portfolio?
We’re excited about RetailMeNot. By working with them, we’re able to introduce a direct relationship for our advertisers to a consumer base.
Right now, it’s a commercial relationship. We treat them as an independent publisher, and they share the data a publisher would typically share with an ad-services company. That could change. When you have the ability to share best practices and platforms, there’s opportunities to unlock efficiencies, not only in how we send media but how we measure it and close the loop.
Now that you own MaxPoint, how has your competitive set changed?
There’s competition anywhere and everywhere. If you look at it from a pure ad tech perspective, our competition would be any company doing managed services or data analytics. If you look at print media, it's any company that distributes ads to a consumer.
A lot of our competition are point solutions. They just do video, email, display or search. We have a broad portfolio of capabilities in print and digital, as well as a targeting and measurement ability. We work with a lot of the independent point solutions in the market.
This interview has been edited.
Correction: This article previously stated that Valssis Digital has 70,000 customers. Valassis Digital has 1,500 customers and its parent company, Valassis, has 70,000 customers.