Extreme Reach has closed its $485 million acquisition of DG's TV ad business, approximately 6 months after announcing the deal. Extreme Reach's CEO and co-founder John Roland told me this morning that all DG customers are being transferred to Extreme Reach's cloud-based delivery platform. The combined company will have $270 million in revenues and 750+ employees.
As John explained, while the short-term tactical benefit of the deal is to gain significant scale in the core business of delivering TV ads to over 7K different broadcast TV stations in North America, the longer-term, more strategic play is to better position Extreme Reach for the fast-approaching era of multi-screen advertising.
TV advertising and online video advertising are taking a big step toward being integrated today, as a result of a deal that Extreme Reach has struck to acquire DG's TV ad business for $485 million.
The deal brings under one roof the 2 big operators of networks that deliver ads to TV stations. In its latest annual report, DG said it delivers ads to approximately 5,900 broadcast and cable TV stations from 7,400 different media agencies. Earlier this year Extreme Reach told me that it delivers ads to 7,000 TV stations on behalf of 3,000 different agencies and advertisers. With the deal, DG will re-focus its efforts exclusively on online advertising, via its MediaMind platform, which it acquired in July 2011, along with numerous other smaller online advertising assets.
More interesting here for observers of the online video advertising space is that Extreme Reach will be in an even stronger position to pursue its strategic priority of integrating the delivery, tracking and reporting of "TV" ads and "online video" ads. I'm using quotes, because, as consumers have massively adopted connected/mobile devices and then use them to view premium video content, the distinction between the terms "TV" and "online" is becoming less meaningful. In other words, video is video, regardless of consumption device.
Another milestone today in advertisers' ongoing quest for clearer insights into how their TV and online video ads perform together: Extreme Reach, a company that until now has mainly focused on distributing TV ad creative to local TV stations, is announcing a suite of cross-media reports that integrate performance metrics from actual TV and online video campaigns. As a result, agencies and advertisers are able to optimize spending in each media and can understand how different permutations of spending and creative drive different results.
As viewers fragment their behavior over connected and mobile devices, the ability to measure ad performance across screens is becoming an increasingly urgent problem for advertisers. Because metrics for online video campaigns are silo'd from TV ad reporting, it is virtually impossible for media buyers to truly understand how the two sets of campaigns worked together.