Online Merger Frenzy: US Ad Bodies Appeal to Federal Watchdogs

04 June 2007

NEW YORK: The two trade bodies representing US advertisers and agencies have launched a joint appeal to the Federal Trade Commission and the Department of Justice, urging vigilance in evaluating the current mêlée of online advertising mergers and acquisitions.

In a joint letter, the Association of National Advertisers and the American Association of Advertising Agencies exhorted both watchdogs to adopt a "careful, wide-ranging and comprehensive perspective" in considering such mergers.

Continues the letter: "During the past month, there have been several major acquisition announcements in the online advertising marketplace. These mergers, if approved, certainly would change the online advertising marketplace.

"As such, those proposed combinations deserve careful scrutiny. It is essential to ensure that none of these combinations restrict competition in the internet advertising marketplace.

"Advertising on the internet is one of the fastest-growing sectors of marketplace promotion; therefore, ensuring its competitiveness is critical for all participants."

The Internet Advertising Bureau, caught between a rock and hard place, remained firmly astride the fence and uncharacteristically restrained.

Says its ceo Randall Rothenberg: "We believe that there are appropriate regulatory and legislative venues for these discussions and debates to take place, and we're happy to have them take up those discussions and debates."

The ANA's Bob Liodice was equally anxious not to be seen stirring an already potent brew.

"It's not just Google-DoubleClick," he assured. "We looked at the whole portfolio of acquisitions and said the whole thing is moving very, very quickly. We don't have the ability to understand the implications. ... We asked in a very neutral kind of way to say, 'would you please take a look?'"

In addition to the proposed $3.1 billion (€2.31bn; £1.57bn) Google/DoubleClick deal, three other major M&A bids are currently in the pipeline . . .

  • Yahoo's intended purchase for $680 million of the remaining 80% it doesn't already own in online ad firm Right Media.

  • WPP Group's ingestion of online advertising company 24/7 Real Media for $649m.

  • Microsoft's intended $6bn takeover of aQuantive, which owns the Atlas, Drive PM and Avenue A/Razorfish online businesses.
In a nod to the ANA/4A letter, Google's senior corporate counsel Don Harrison oozed aplomb: "We are confident that upon further review the FTC will conclude that this acquisition poses no risk to competition and should be approved.

"Numerous independent analysts and academics have determined after looking at this acquisition that the online advertising industry is a dynamic and evolving space - as evidenced by a number of recently announced acquisitions - and that rich competition in this industry will bring more relevant ads to consumers and more choices for advertisers and website publishers."

Data sourced from; additional content by WARC staff