Google's cookieless future spawns analytics deal frenzy

Not everyone is lamenting a cookieless future. For one corner of marketing tech, Google’s decision to end cookies and launch its own cohort marketing system has spawned an acquisition frenzy. Google Marketing Platform partners—even some of the smallest—are suddenly fielding lots of unsolicited offers at high prices from agency holding companies, private equity and tech rollup firms around the world. Big dollars are chasing the notion that whoever gets a foothold in this hard-to-enter space will have a lucrative role helping marketers navigate the future of digital advertising. Without running auctions, some Google partners are getting competing bids at sky-high multiples up to 20 times cash flow (EBITDA—earnings before interest, taxes, depreciation and amortization), according to Bob Morris CEO of digital and mergers advisory company Bravery Group. “These companies are going for at least three times what people were paying on a historical basis,” Morris says. He was pulled in to help several such acquisition targets starting in March, shortly after Google announced it wouldn’t replace cookies in Chrome with any other third-party identifiers but instead develop its own Federated Learning of Cohorts [FLoC] ad targeting system. He expects the first of those deals to close next month, but with more to come. “I have not seen so much craziness in the 10-plus years we have had the business,” says Alex Yastrebenetsky, CEO of InfoTrust, a Google Marketing Platform partner since 2012 based near Cincinnati, who has in recent weeks been getting multiple acquisition inquiries from agency holding companies and private-equity firms alike. Though it has under 200 employees, InfoTrust appears to be the biggest independent among the Google partners listed on the tech giant’s website. InfoTrust revenue grew 50% last year even in the pandemic, and even before Google announced it wouldn’t be replacing third-party cookies with any other personal identifier. Yastrebenetsky now counts 220 of the 2,000 largest companies in the world as clients. No offer so far has topped 12 times EBITDA, Yastrebenetsky says, but then he hasn’t been trying to negotiate either because he has no interest in selling. It probably wouldn’t take that much to bump up a bid, he says, citing a friend in e-commerce services, a space now attracting similar investor interest, who recently got an offer raised 50% instantly upon mentioning that he was thinking of bringing in an investment banker to help. Agency holding companies, the biggest of which all have at least one entry in the Google marketing partner universe, don’t appear as motivated—i.e. making offers as big at this point—as some European tech companies Yastrebenetsky says. Morris likewise has seen some of the strongest interest from what he describes as smaller European agency and tech holding companies. The bigger agency holding companies may regret not being more aggressive with Google partner acquisitions, he says, even though they already have their own entries established there, if it means letting a new wave of overseas competition get a stronger foothold. Driving the acquisition interest is that it’s a lot easier to acquire your way into the Google partner realm than get a new certification. “If you just want Google analytics certification, it’s one thing. But if you want to resell Google Marketing Platform, Google is making it more and more difficult,” Yastrebenetsky says. Google once had more partners in the partner ecosystem, but thinned the ranks three years ago when it merged disparate offerings into the single platform, because “not all of them were doing a good job,” he says. Google declined to comment. Google doesn’t make money on analytics, but does when its analytics are used to show return on investment, leading marketers buy more, Yastrebenetsky says. “So they want the partners to truly measure analytics” in a way that maximizes the value of investment.

Google's cookieless future spawns analytics deal frenzy

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