“A big part of the reason why they bought us rather than just have a partner is that actually buying this technology stack helps them maintain independence from the media sellers that are increasingly owning the buy-side tech stack,” he said.
WPP’s motivation behind the deal is also part of a growing need among agencies to adapt to the evolving tech landscape or lose out to vendors looking to bypass agencies and go straight to the brand source.
“[WPP Group CEO] Sir Martin [Sorrell] regularly speaks about data and technology being key differentiators for WPP versus other agency holding groups,” Litman said. “This move further underscores their ongoing commitment to technology and the evolving nature of how agencies are able to serve their clients. Suppliers are increasingly building out very strong service capabilities to go client-direct. The natural response is for agencies to build out technology capabilities of their own.”
Sorrell has been vocal about the evolving role of agencies and his own dubiousness about the much-discussed trend toward brands bringing programmatic spend in-house, as Allstate and others have done, calling it “a temporary phenomenon” and questioning “whether [clients] will be able to apply technology successfully.”
That said, agencies are aware that continued relevancy means rolling up their sleeves on technology, as evidenced by Publicis Groupe’s purchase of mobile-focused ad platform RUN in October 2014 and WPP-owned Xaxis’s own acquisition of mobile app retargeting company ActionX in March of this year.
“The whole world of digital media is evolving to look an awful lot like a mobile device,” Litman said. “We’re bringing mobile skill and advanced mobile technology into an organization large enough to bring it to global scale.”
Medialets had raised $33.4 million in five rounds since it was founded in 2008. In addition to its holding company clients, Medialets has worked with large brands, including American Express, P&G, HBO, Toyota, Goodyear, Chase and Dunkin’ Donuts. The company will continue to run daily operations out of its existing office in New York.