Partner, build or buy? WPP Group has decided on the last in the case of Medialets.
The global holding company said Wednesday it will acquire the mobile ad platform as a wholly owned subsidiary. Terms of the deal were not disclosed.
Clients across the breadth of WPP’s holdings will have the option to use Medialets' tech.
Medialets CEO and co-founder Eric Litman told AdExchanger that the company will continue to run independently, with plans to expand internationally, invest in capabilities around attribution and identity and up its headcount “significantly” from where it stands now, at 50+. “Anyone who wants to stay is staying,” Litman said.
WPP first started working with Medialets in 2014 when MediaCom began using Servo, Medialets’ buy-side mobile ad serving and attribution tool, for its clients globally. The relationship grew from there.
According to Litman, the WPP deal won’t stop Medialets from continuing to work with its existing big agency holding company clients, including Publicis, Omnicom and Interpublic. “We may be a wholly owned subsidiary,” Litman said, but WPP won’t have access to Medialets' client data, which will remain “distinct."
“We’ve gone through a very rigorous process for the second year in a row, having our tech stack audited by the Media Rating Council, and a big part of that is having strong data protections in place,” he said. “We silo data from client to client to prevent even people inside our own company from looking at data or manipulating data. WPP has GroupM, Mediacom, MEC, Maxis, Mindshare and Kantar, which have all sorts of interesting data. We’ll be able to work with each and all of them, as well as folks outside the WPP fold.”
“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.