Publishers pluck online properties

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Several traditional publishers that are aiming to boost ad revenue and take advantage of new online advertising technologies have purchased online media companies recently.

The latest such acquisition is Gannett Co.’s June purchase of PointRoll, a rich media company that develops "mouse-over" technology and other ad formats allowing advertisers to measure the direct impact of online campaigns more effectively. Terms of the deal were undisclosed.

Gannett had been using PointRoll ad technology on some of its sites, including its flagship The acquisition will allow the publisher to roll out the technology to other sites in its network of more than 100 publications, as well as boost ad revenue.

"The reason we had an interest in PointRoll has a lot to do with how fast direct marketing is growing on the Internet," said Craig Moon, president-publisher of USA Today. "Direct marketers want more interactivity, and they want to be able to capture data and provide ROI."

"PointRoll has the technology to facilitate that better than other companies," Moon added. He said the acquisition will allow Gannett to expand its advertiser base and leverage relationships with existing advertisers.

"There is a nice match with a lot of [PointRoll] clients and companies we do business with," Moon said, pointing to clients such as Staples Inc. and Dell Inc.

PointRoll to operate as standalone

PointRoll will operate as a standalone company within Gannett. Chris Saridakis, who was PointRoll’s chief operating officer, has been named CEO. Jules Gardner, its founder and former CEO, is leaving the company.

Investment bank Jordan, Edmiston Group represented PointRoll in the deal.

"There is strong interest from diversified publishers to acquire leadership positions in online media companies," said Tolman Geffs, Jordan, Edmiston’s managing director.

"There is no question that media consumption is shifting online, and ad dollars are following that."

A recent Jupiter Research study found that 26% of online adults prefer the Internet for national and international news, up from 19% in 2001.

"Newspaper companies weren’t [buying online companies] two years ago," Geffs said. "Now, they are getting pretty serious about it," he added, pointing to recent deals including E.W. Scripps Co.’s acquisition of in June, The New York Times’ acquisition of in February and Dow Jones & Co.’s acquisition of in January. (Jordan, Edmiston did not represent those deals.)

"Gannett owns a profitable but slow-growth franchise," Geffs said, adding, "They are reinvesting that cash flow into faster-growth businesses."

Gannett has taken stakes in two online companies with Knight-Ridder and Tribune Co.: in online news distribution service in March, and last year in online marketing company CrossMedia Services.

Deals paying off for publishers

Randy Kilgore, senior VP-advertising at Dow Jones Online, which publishes The Wall Street Journal Online and other business publications, said the acquisition of from CBS made sense for several reasons. "The [Online] Journal is clearly a subscription site and has a highly qualified audience, so we couldn’t offer advertisers a really extensive reach," he said.

"By acquiring MarketWatch, we are able to go out and start talking about reach and talk to a whole new set of advertisers."

He said MarketWatch’s base of business and financial advertisers is complementary to the Online Journal’s b-to-b and technology advertisers.

"There is a great opportunity to talk to each other’s advertisers about a larger opportunity using the combined entity," he said.

For example, previous Wall Street Journal advertiser United Technologies Corp. (UTC), a b-to-b marketer in several industries, had not done much advertising on before the Dow Jones acquisition.

By pitching UTC on the opportunity to own the gateways to the largest business and financial news sites online, Dow Jones was able to sell a prominent online ad on both sites on a day that UTC had a big product announcement, and now UTC is a regular advertiser on both sites, Kilgore said.

The deal also gives Dow Jones the ability to use behavioral targeting more effectively, he said. The Online Journal and had both used Revenue Science technology to target ads to users based on behavior.

"Now, we can use it with much greater reach," Kilgore added.

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