Sam's Club agrees to buy tech and team from WPP's Triad
Sam’s Club has agreed to acquire proprietary technology and much of the team that works on its account from WPP’s Triad for undisclosed terms, according to a statement from the companies.
The deal follows a move by Sam’s Club’s corporate sibling Walmart to bring digital advertising sales and related analytics work in-house earlier this year from Triad, which had handled the work since 2004, eliminating Triad’s biggest account. Triad’s relationship with Sam’s Club goes back to 2007.
“Our Triad team and the technology stack developed to run the Sam’s Club digital retail media program have been very successful,” said Triad CEO Sherry Smith in the statement. “We’re committed to supporting Sam’s Club and their advertising clients with a smooth transition over several months, and we wish them continued long-term success.”
“This area of advertising is undergoing exponential growth and is incredibly competitive,” said Tony Rogers, Sam’s Club chief member officer. “So when this opportunity came to us, it was an easy decision. The team’s expertise and tools, combined with the talent and rich insights we already have, rounds out our in-house digital advertising capabilities and will help us grow this business even faster.”
The Triad team includes people working in account management, creative, analytics and information technology. The acquisition will likely make Sam’s Club’s in-housing process smoother than Walmart’s. Triad at least temporarily enforced non-compete provisions to keep some people on the Walmart team from moving to Walmart Media Group earlier this year, according to people familiar with the matter (Walmart and Triad declined to comment). And in August, some advertisers reported delays for their Walmart ad campaigns due to what the retailer called unexpected glitches during transition.
Triad will continue to “invest and innovate in services both for brands and retailers as the industry continues to evolve,” Smith said. Remaining clients include CVS and Bed Bath and Beyond, Kohl’s, Staples, Office Depot and Wayfair.
In March Triad began evolving its business beyond selling advertising on retailer websites toward a broader programmatic offering not linked to specific retailers or their data. WPP sought a buyer for the entire business earlier this year, according to published reports, but those efforts appear to have ended, according to people familiar with the matter.
WPP bought Triad in October 2016 for a reported $300 million, according to The Wall Street Journal. In an earnings conference call this March after news of the loss of Walmart departure broke, WPP CEO Mark Read expressed reservations about the acquisition, which occurred under his predecessor Martin Sorrell.
WPP filed suit last month in New York against two private-equity firms that previously owned Triad, three former Triad executives and an insurance company that indemnified against losses on the deal. WPP said it has lost more than $120 million because of “breaches of representations” and “actual fraud,” according to Bloomberg News.
One of the former owners, Rockbridge Growth Equity, in a statement to Crain’s Detroit Business, said the WPP complaint doesn’t attribute wrongful acts to Rockbridge and “categorically denies that there are any credible facts to support any claims made against it in the lawsuit.”
In 2016, Triad had $509.3 million in gross revenue, including $239.4 million from Walmart that was millions of dollars short of projections provided when the deal closed, according to WPP’s complaint. By 2017, Triad revenue had fallen to $399.2 million with $89.9 million in net revenue, as Walmart revenue remained flat.