WPP has agreed to acquire 24/7 Real Media, a global digital marketing company, for $11.75 per share, thus valuing 24/7 Real Media at $649 million. The reported revenues for 24/7 Real Media (TFSM) for the year ended December 31, 2006 were $200 million, up by 43 per cent on prior year.
WPP believes that this acquisition will strengthen its position in the rapidly-growing digital marketing industry, thus enhancing its position in search marketing, digital media and adding technology skills.
Commenting on the announcement, Sir Martin Sorrell, CEO, WPP, said, “Our clients, and therefore our industry, are becoming more media and technology driven. 24/7 Real Media significantly enhances our capabilities, technological resources and talent, as well as adding to our geographic coverage and our measurable skills.”
The board also believes that the combination of TFSM and WPP will enhance the group’s assets and capabilities in digital marketing, open up opportunities for the group to enter new businesses and locations by adding new capabilities in online media, and using the numerous regional offices of TFSM.
Calling the acquisition beneficial for both the companies, David J Moore, Chairman and CEO, 24/7 Real Media, said, “We look forward to working with WPP to leverage our award-winning Decide DNA search engine marketing platform and our other technologies to create the leading advertiser technology offering in the marketplace.”
WPP also plans to strengthen its position in the SEM area, increasing search spend under management by $200 million, taking search volumes to more than $450 million, and adding a robust technology platform for managing search.
Overall, WPP believes that the acquisition will contribute to all of WPP’s three strategic goals: adding to revenues in Asia, increasing the contribution from marketing services, and the share of revenue from quantifiable marketing services.