Thursday, December 23, 2004

Search Marketing Firms Consolidation

The rapid expansion of search marketing means that companies with a proprietary technology or solid customer base will be hugely attractive acquisition targets. iProspect had a little of both, but still the market is extremely fragmented and has plenty of room for new entrants for now.

Want to start a business and become wealthy in 3-5 years? Build an SEM/SEO firm and scale as quickly as possible. Flip the firm as consolidation heats even further.

Here's the story . . .

Aegis Group, the UK-based holding company that owns Carat, today said it's acquiring iProspect, a provider of search marketing services; the deal is estimated at $50 million. The move is yet another sign that big marketing services companies are serious about keeping search services in-house, and are no longer leaving potential revenues derived from offering those services at the table.

JupiterResearch estimates that search advertising and related services will outpace other segments of online advertising growing from $2.6 billion this year to $5.5 billion in 2009. Search accounts for more than 30 percent of online advertising spending in the United States.

iProspect will live within Aegis' Isobar unit, Carat's newly formed global network of digital agencies. The Isobar network will deploy iProspect's proprietary bid management technology within its U.S. agencies Carat Interactive and Freestyle Interactive, and is also expected to deploy globally. Isobar will run the 85-person iProspect as a stand-alone brand, according to Sarah Fay, president of Isobar in the United States.

Carat Interactive has offered search services to its clients for some time, 'We have a very good search capability through Ron Belanger's group and we fully intend to continue to help that group grow,' Fay says. 'It's not so much that anything was missing, but we've done exhaustive technology reviews for pay-per-click tools and we have not landed on any one provider that does everything we need. We see iProspect's iSEBA [iProspect Search Engine Bidding Agent] as providing what we need.' Carat Interactive has been outsourcing paid inclusion services for its clients; it provides organic search services on its own.

The iProspect tool enables pay-per-click search advertising, bid management, campaign tracking, and reporting. 'Th"


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