DoubleClick is selling its Ad Effectiveness research practice to online research firm Dynamic Logic, continuing the Web ad leader’s efforts to reduce its dependence on non-technology revenues.
In exchange for the unit, DoubleClick will receive a 10 percent equity stake in Dynamic Logic, as well as rights to receive additional equity in the future through an undisclosed procedure. DoubleClick also will receive the right to appoint a non-voting observer to Dynamic Logic’s board of directors.
Under the terms of the deal, Dynamic Logic will become the exclusive provider of effectiveness-testing research for DoubleClick.
Dynamic Logic said it would work to integrate the Ad Effectiveness group — which is currently a part of DoubleClick’s Diameter research division — into its own product offering, AdIndex.
Like AdIndex, DoubleClick Ad Effectiveness uses pre- and post-exposure surveys to test campaign creatives, formats, frequency, brand impact, and return on investment. Ad Effectiveness also relied heavily on DoubleClick’s ad serving technology to study campaign efficacy.
Dynamic Logic and DoubleClick say the deal would contribute to an industry-wide standard for measuring online ad effectiveness — better overall for the online ad space.
“Based on our independent research, Dynamic Logic provides a valuable set of metrics that makes advertising easier to buy, sell, and measure,” said Dynamic Logic chief executive Nick Nyhan. “Dynamic Logic is pleased to work with a market leader such as DoubleClick to offer a trusted and standard approach industry wide.”
However, this establishment of an industry-wide standard comes at a price — the loss of competition. Dynamic Logic has established itself as the leader in branding-oriented research, and DoubleClick’s Diameter offering was its main rival. With this deal, however, that competition is a thing of the past — another casualty of the consolidation sweeping the online advertising space.
Spokespeople for the firms were not available for comment on the reasons behind the sale. However, the move isn’t inconsistent with DoubleClick’s recent strategic moves. In mid-November, the company sold off its European media network in return for a stake in the buyer, German Web ad firm AdLINK. As with the sale to Dynamic Logic, DoubleClick also reserved the right to up its stake in AdLINK in the future, if desired.
At the time, DoubleClick executives said the structure of such deals were highly attractive to the company, since the Web ad giant could divest a money-losing venture, while still being able to benefit from and expand its control over the venture, should it prove profitable in the future.
As in the earlier deal, the agreement with Dynamic Logic also allows DoubleClick to concentrate on its technology offerings, which have been accounted for the lion’s share of the company’s revenue in recent quarters. On the research side, Diameter will continue to offer media planning tools, through its @plan unit, and reporting through its DART for Advertiser ad server.
DoubleClick also will continue providing data to clients about sites’ audience, through a reseller deal with comScore Networks, a panel-based Web researcher.
Additionally, the company recently launched its Site Directory, which it’s currently providing free-of-charge to DFA clients. Ultimately, DoubleClick will charge for Site Directory as a separate product, and plans to integrate it with its newly acquired media planning service, Adgility.
“DoubleClick will maintain its leadership position in providing comprehensive media planning tools,” said Doug Knopper, Diameter’s vice president and general manager. “This transaction allows us to concentrate on our technology-driven research and planning tools. We will continue to have the ability to offer our customers customized ad effectiveness research through our relationship with Dynamic Logic.”
