The separation will remove that strain from Neustar’s marketing services arm by allowing each business to operate under its own capital allocation policy.
Hook, however, said that the restructure isn’t about cost reductions but rather about creating room for Neustar’s information services arm to become a martech pure play.
Neustar started buying its way into information services in 2011 when it acquired caller ID infrastructure firm TARGUSinfo for $650 million, which produced $150 million in revenue at the time of acquisition. In 2013, Neustar acquired DMP Aggregate Knowledge for $119 million. (AK brought in $7 million in revenue.) And in late 2015, Neustar acquired marketing analytics company MarketShare for $450 million, which expects to see $70 million in revenue for 2016.
Neustar intends to be a major player in the info services market, but whether or not it will be able to compete with the likes of Oracle, Adobe and Salesforce remains to be seen.
“We’re fairly unknown in the market, so we intend to use this event as our coming-out party, if you will, and no longer be under the radar,” Hook said.
“Doing a major rebrand will get them some attention and give them an opportunity to focus their message and recommit themselves to a vision that people may not be completely familiar with yet,” Gartner’s Frank agreed.
Neustar links security and marketing services to protect marketers form digital dangers like data leakage and DDoS attacks, while using its database of phone numbers and personal addresses to optimize their campaigns.
“From our point of view, security is marketing,” Hook said. “Protecting our clients’ websites and making them work as best as possible is part of the 360-degree brand experience online and offline.”
The yet-to-be-named information services company will not have (and never has had) access to the order management and numbering service’s data, which is heavily regulated by the Federal Communications Division.
Neustar’s order management and numbering services business saw $580 million in revenue in 2015, with a compounded annual growth rate (CAGR) of 8% over the past four years. Information services grew to $470 million in 2015, with a CAGR of 25% over the last four years.
The tax-free spin-off is expected to be completed within the year.
Updated AK projected revenue from $70M to $7M.