{mosimage}Google Offloads Search-Marketing Business To Publicis
New York – Barley four months ago, Google announced plans to dispose of its Performics arm, it inherited in its acquisition of DoubleClick; and just yesterday its search bore fruits that it had found a willing buyer for its Performics search-marketing unit: who, it turned out is none other than Google’s good buddy Publicis Groupe will be the buyer.Publicis Groupe plans to strengthen its new VivaKi Nerve Center ad technology platform by acquiring Google’s Performics search marketing division, the companies announced Wednesday.
“The deal gives Publicis a big boost in search-marketing capabilities.”
In the meantime, Google had indicated in April its intention to divest itself of Performics, a part of DoubleClick, which Google acquired in March for US$3.1 billion.
The conflict of interest is pretty clear, given that Performics advises clients on how to maximize their visibility on Google.
Publicis, alternatively, has been trying to strengthen its digital offerings. The company, which owns ad agencies including Leo Burnett and Saatchi & Saatchi — and thus handles work for clients like Visa and General Motors — recently reorganized. This was meant to help its four media-buying agencies offer clients more scale for digital ad placements, to allow the company to begin work on ad-exchange strategies, and to help it train its staff better in digital technologies.
In June, Publicis announced that it was building VivaKi to leverage the collective scale of Digitas, Starcom-MediaVest, Zenith-Optimedia and Denuo to develop new services, tools and partnerships, including new and emerging performance marketing platforms, and the Nerve Center houses their key performance marketing assets, including Phonevalley, Webformance, Click2Sales and iBase.
VivaKi aims to simplify how companies purchase Web and mobile ads and that backing the project were Internet giants Google, Yahoo, AOL and Microsoft.
Performics, the fifth-largest search agency by revenue (2006), according to Ad Age’s most recent Search Marketing Fact Pack, will fit within Publicis’s recently formed VivaKi Nerve Center division. Performics has two attractive assets, said VivaKi President Curt Hecht. Because it started as a search bid-management platform, it has a culture of building applications and technology. He will use Performics to build tools that can be used across VivaKi, in its search as well as performance marketing.
“Clients want operational efficiencies and technical differences,” he said. “And increasingly they are asking not only for brand marketing solutions but performance marketing solutions.”
For Google, owning Performics has put it in the uncomfortable position of providing search engine marketing (SEM) and search engine optimization (SEO) services.
SEO and SEM firms, which provide services for improving Web sites’ search-engine rankings and running effective search-engine ad campaigns, have been vocal about their displeasure at having Google, until now a partner, turned into a competitor via Performics.
SEO firms have been concerned that Performics would get special access to inside information about Google’s search-engine algorithms, putting them at a disadvantage. Meanwhile, SEM firms fretted that Google would push its in-house Performics SEM services at highly discounted prices, or maybe even for free.
Launched in 1998, the 200-person shop will serve as a company-wide search resource for Publicis agencies. It will bring to Publicis one of the top search agencies, boasting offices in Chicago, New York, San Francisco, London, Hamburg, Sydney, Singapore and Beijing.
Google did not comment on the reasons for its divestiture of the unit, but in a statement, Chairman-CEO Eric Schmidt said, “We look forward to working with Performics as a partner.”
Terms of the transaction were not disclosed. The deal is expected to close in the third quarter.