TradeDoubler will bolster new-look AOL on its weakened Euro front

These have been eventful months for the Time Warner/AOL/Advertising.com stable.

These have been eventful months for the Time Warner/AOL/Advertising.com stable. In Europe, AOL is having to compete on equal terms with other Web portals – as a pure media and content business, now that it is no longer an ISP (internet service provider). AOL has great assets, particularly its sales and commercial teams, but there is doubt about whether European consumers need another general portal like aol.com.

TradeDoubler, meanwhile, has a successful, eight-year trading history in Europe, and has attracted widespread interest from potential partners and owners. Advertising.com has long coveted the pan-European affiliate marketing strength of TradeDoubler, and informal discussions have been held between the two businesses for two years.

While Advertising.com acquired DayRates (which then passed to AOL/Time Warner), TradeDoubler pursued a strategy of organic growth and local acquisitions. There is no doubt that TradeDoubler is a logical expansion target for AOL/Advertising.com, though it’s a tough challenge to take on while – particularly in Europe – the collaboration and integration of AOL and Advertising.com remains unclear.

Nevertheless, TradeDoubler will be a great boost to the group, given AOL’s evolving European business. While Advertising.com is strong in the UK and Scandinavia (and increasingly in Germany), TradeDoubler’s prominence in southern as well as northern Europe will offer the group a more balanced, pan-European, strength-in-depth quality. In addition, Advertising.com’s business has come under threat of late from the international growth of several competitors, including Tacoda, Revenue Science and BlueLithium, and TradeDoubler’s acquisition gives it (and AOL) an opportunity to seize the initiative and be re-cast as clear market leaders.

Some may be surprised by the $900m (£457m) price tag for TradeDoubler, though it is within 10% of the most recent market capitalisation. Earlier discussions centred on a valuation several times smaller than the current deal. However, the market has developed swiftly: the burgeoning online advertising market has caused valuations of digital businesses to soar. As a result, AOL sees no alternative to paying the price in a brutal, sellers’ market.

Hugo Drayton is chief executive of 121Media.com, and formerly managing director, Europe of Advertising.com

Recommended

Organix promotes Rosier to MD

Marketing Week

Organix, the children’s organic food company, has promoted sales director Anna Rosier to managing director. Her appointment comes as founder Lizzie Vann moves to become chairman of new charity, The Organix Foundation. Vann, who founded the company in 1992, will now run the charity that uses Organix profits to fund independent research into food quality […]

Coke scraps global marketing team

Marketing Week

Coca-Cola is axing its global marketing team just days after chief global marketer Mary Minnick announced that she was leaving the company to pursue other goals. The soft drinks giant is now planning to divide reporting lines with innovation and strategy reporting to chairman and chief executive Neville Isdell and marketing reporting to president and […]

Comments

    Leave a comment