And it goes to WPP, according to the press release this morning (here’s the WSJ story). 24/7 Real Media was allegedly being looked at/shopped to MSFT, in the wake of the company’s failed attempt to buy DoubleClick, for $1 billion. The acquisition price according to the release is $649 million.
The company does soup to nuts ad buying, serving, search marketing and tracking (including mobile). I don’t have any perspective on the price, but it makes sense for WPP, which says it manages $50 billion in ad budgets through a roster of companies. WPP not long ago also made an investment in Spot Runner. It also has investments in VideoEgg and JumpTap.
Here’s what WPP said about why it’s buying 24/7:
Online advertising will exceed $33 billion in 2007 or more than 8% of global advertising spend, based on GroupM estimates. This is expected to continue to grow strongly in the future, particularly as traditional media increasingly embraces and develops digital channels. The Board of WPP believes that technological capabilities and skills, combined with the Group’s understanding of client demands and media, will play an increasingly important role in providing the best solutions for our clients.
This is about having the necessary digital assets to compete and represent clients going forward (as brands go online and mobile) and not wanting to get shut out by somebody else taking the desired asset off the market. Thus there are rational and irrational elements to all this M&A activity.
Clearly we’re in the middle of a land grab, with more to come certainly.
Greg Sterling is the founding principal of Sterling Market Intelligence, a consulting and research firm focused on online consumer and advertiser behavior and the relationship between the Internet and traditional media, with an emphasis on the local marketplace.