CEO Don Scales and CTO Peter Randazzo of iCrossing discussed the acquisitions and its implications.
AdExchanger.com: What was the trigger for you for acquiring Red Aril?
DON SCALES: If you focus on the iCrossing strategy, we've come forward in recent years with a view of connectedness and talking about connected brands. Up to this point, while I think we've been able to execute at a certain level around the concept of connectedness, we've in many ways been channel optimizers. We’ve been able to help our clients optimize around paid search and natural search, or whatever it might be. But, we didn't have the enabler that could help us to bring that connectedness to life.
The Red Aril opportunity allows us to bring the DMP into this so we can give one view of the customer across many channels to enable real‑time content optimization for our client. We think Red Aril is exactly what we needed at this point in time.
Can you speak to what this means for Hearst?
DON SCALES: When we look at it from the standpoint of Hearst, iCrossing is able to build solutions with a heritage of a large publisher, an agency like ours and a DMP like Red Aril. There's no other entity like that in the marketplace today. Hearst brings audience across a large scale and access to a large volume of high‑value customers to clients with a wide stable of premium properties today. That presents an opportunity for the brands to grow their audiences. Our clients will have an opportunity to identify and reach those customers across Hearst properties if they so desire.
And that is my next question. The segmentation capabilities of Red Aril, do you anticipate those being rolled out across Hearst properties or does that remain to be seen?
DON SCALES: Yes, we were heading down that path already. [CTO Peter Randazzo] had a roadmap in place where we were starting to do just that with our own internal capabilities. What Red Aril has done is it allowed us to put the pedal to the metal on this and bring it to life a lot quicker than what we would have done internally.
Can you give me a use case or two of where this might come in handy in the near term, having this kind of technology in‑house?
PETER RANDAZZO: So in the short term, it's about going after low‑hanging fruit. We've got a very large stable of Fortune 500 clients that we provide services for with our connected marketing platform. Over the next couple of months we're going to execute our integration plan so that for any one of those clients I'll be able to turn on the Red Aril platform at will. Those steps have already been mapped out. That means that for every one of our clients, we're able to say, "We're going to turn on the audience segmentation and profiling capabilities of Red Aril. Is that OK?" The answer in most circumstance will be yes, because many of our clients are true marketers that look at the full lifetime marketers and they want one‑view of their customer online as they do offline.
So once we do that, then we can go back after low‑hanging fruit. Of course, that means audience extension, the possibility of doing tiered audience extension into the Hearst network, pixel management because once you start caring about the value of your audience then you care about how that leaks to third parties, and of course attribution and segmentation analysis.
In the long term, we'll be looking to infuse audience into every service that we provide. Once you have a real‑time view of the customer available online, then why not the content on your site or your landing page or any one of those channels? A true connectedness based on audience.
So, you see the Red Aril DMP initially segmenting audience that's related to the cookie pools that the advertiser has, correct?
PETER RANDAZZO: Yes. Because we've already pixeled the client's site, we fire the Red Aril cookie in tandem and that allows us to then begin to profile information behavior on their sites. You take their first‑party data, whatever data they have, and add it to that mix, of course. Depending on how rich that pool is, you could also add third parties to that mix and call them using their pixel management system so those third parties do not get any behavioral contextual information, of course. But then start adding other segments that you want to lay on top from the major data providers. From that point on, you can do lookalikes out in the exchange because they also have a trading desk that sits on the Google Exchange or OpenX.
Let's talk about the Red Aril team. What happens there?
DON SCALES: Yes. They have roughly 30 employees and most of those employees are development types. Clearly those are the people that are critical to this. So at this point in time, not only do we plan on keeping them all, we need them all. So the short answer is this was the acquisition made upon opportunities that we see in the marketplace for future revenues. This wasn't done for purposes of cost synergy.
How long did it take for this deal to come together?
DON SCALES: Well, that's kind of a relative question. We had been talking to them for a while. Peter's known these folks for a while. We've gotten to know them and understood their technology before we actually got into active discussions with them. But if you're asking how long did the actual negotiation take, it probably took a few months. But that's sort of typical.
So should I start thinking that for Hearst, iCrossing is putting together this marketing stack, if you will, similar to the way Adobe is putting together a marketing stack or end‑to‑end solution for the marketer? Do you like that analogy?
DON SCALES: I can't speak for Adobe on how they're putting it together. But, I can tell you that when Hearst acquired iCrossing, they wanted to use iCrossing as the linchpin of their whole marketing services strategy. This is just another step in doing that. The analogy as you're putting it forward, I can't particularly comment on. But I do know that we are the center pin of what Hearst is trying to do.
What's next in terms of acquisitions? Maybe something in mobile or video? Any thoughts there?
DON SCALES: All I can tell you is iCrossing always has their eyes open. This is our seventh acquisition over the last six years, so clearly we're always looking for quality firms and we know how to integrate them. I don't think this is the end of the road for us by any stretch of the imagination.
How do you define the competitive set for iCrossing today?
DON SCALES: Well, it depends. We have such a diverse offering today. When you look at where we have historically competed as a digital marketing agency, then you're looking at competing with the likes of Razorfish or Digitas or it could be an AKQA. Or we compete in the search arena against people like 360i and Impact and those kind of guys.
Because of the breadth of our service offering, we have quite an assortment of competitors.
Finally, how does the acquisition of Red Aril put you ahead of your competitors?
DON SCALES: Right. We've always viewed - and hindsight's always 20/20 - but we always went into this acquisition with Hearst as this was our preferred place to be because we felt like bringing a digital marketing agency in alignment with a major publisher was going to be a unique proposition in the marketplace, especially as it relates to content and content development. That's proven out to be the case over the last 18 months since they acquired iCrossing. Now you put something like Red Aril on top of that, and honestly I think it's unique in the marketplace. I don't think we can point to anybody else who has the unique capability that an iCrossing, Red Aril and a Hearst brings to a potential client.
By John Ebbert