Surprise bidder tops Amazon’s offer for Sizmek assets in quest for independent ad server

UPDATE: June 7, 2019: After this article’s publication, a Sizmek spokesperson provided the following comment to Marketing Dive: “We’ve signed an agreement for Amazon to acquire Sizmek’s ad server and DCO assets and are seeking expeditious Court approval of it. We are respectful of the Court-supervised sale process and will provide more information to stakeholders when appropriate.”

Dive Brief:

• Ycor, parent company of the data marketing firm Weborama, has topped Amazon’s bid for the ad server and dynamic creative optimization (DCO) solution of Sizmek, according to [G]. Financial terms of the offer, which Ycor and Weborama said they have been considering for two months, were not disclosed.  

• With the move, Ycor intends to build an “independent, neutral and transparent” ad server, one that can act as an alternative to “dominant offerings.” Sizmek’s ad server is the second largest in the world behind Google’s Marketing Platform.      

• Amazon late last week confirmed that it had entered an agreement to acquire Simek’s ad server and DCO, while not sharing financial details of the deal, which has not officially closed. The online retailing giant said that it would keep the assets separate from Amazon Advertising, while noting that its ad unit and Sizmek “have many mutual customers.” Sizmek, a once-hot ad-tech firm, entered Chapter 11 bankruptcy proceedings earlier this year and has [G].   

Dive Insight:

Ycor allegedly topping Amazon’s bid for the ad server and DCO of Sizmek throws a surprising fold into a situation [G]. Ycor claims it is looking to avoid a situation where two tech giants — Amazon and Google — own and operate the industry’s two largest ad servers.

“[G]iven how incommensurate Amazon’s resources are, it can bring ‘David versus Goliath’ to mind,” Alain Lévy, CEO of Weborama and a partner at Ycor, said in a press statement. “Today, we make a financial commitment, taking into account what is at stake for the industry as a whole: prevent the advent of a duopoly.”

However, questions linger as to why Weborama parent Ycor — not a widely recognized name — is bidding for Sizmek’s assets and how the two would work together. 

“This move is a real surprise, as Weborama shifted focus from adserving to data management and data aggregation a couple of years ago,” Hugo Loriot, managing director of the [G][G], said in emailed comments to Marketing Dive. “I’m not sure Weborama would help Sizmek grow and apart from helping them scale in the US, I’m not sure Sizmek is a valuable addition to Weborama.”

Ycor is also the personal holding company of Maurice Lévy, the chairman of agency giant Publicis, [G]. Ycor [G] as a “new breed of technology startup,” one that’s focused on data-driven solutions and bleeding edge technologies like blockchain and artificial intelligence.   

The connection between Publicis and Ycor isn’t tangible enough to suggest that Lévy and Co. are building out some sort of comprehensive ad-tech network. Publicis is already busy integrating other tech offerings, like Epsilon and its PeopleCloud platform, and any competitive advantage the network would gain from Ycor owning Sizmek’s assets is unclear, Jay Pattisall, a principal analyst at Forrester focused on the agency business, told Marketing Dive.

“To have some loose association with Maurice Levy’s other company, it doesn’t seem like it would be a fully end-to-end media offering,” Pattisall said.

But one reason Ycor might be bidding for Sizmek’s ad server and DCO is because Publicis has potentially burned through its M&A budget for the year, Pattisall​ speculated. Publicis purchased Epsilon for $4.4 billion in April, a price tag roughly twice previous estimates of the data marketing firm’s value.

“You could argue that Ycor is doing this because Publicis doesn’t have the money to do this,” Pattisall​ said.

If Ycor does buy Sizmek’s ad server and DCO, those products would still likely operate fairly independently and serve a broad client base, per Pattisall. That would probably be true under Amazon as well, hence why Amazon said it would keep Sizmek assets separate from Amazon Advertising for the time being. IPG has enacted a similar strategy with Acxiom Data Marketing Solutions following its purchase of the division for $2.3 billion last year.  

For now, the ball is in Amazon’s court in regards to a Sizmek deal. The news signals the start of a potential bidding war between Ycor and Amazon, as the latter is highly unlikely to give up on acquiring desirable technology assets that could help it further capitalize on its already-booming ad sales business. 

“It sounds like a lot of the story is just the battle between Amazon and another suitor,” Pattisall said.