For companies in the marketing industry, expanding your footprint is the name of the game. To penetrate new markets and broaden your reach with relevant customers, marketing executives must plot growth strategies for establishing their companies as leaders in the sector with the skills and technologies critical to success.
Along with an organic expansion plan, a well-planned acquisition strategy can offer a promising roadmap to success. Acquisitions can diversify revenue streams, broaden a company’s capabilities and propel a business to dominance in critical sectors.
Salesforce’s recent announcement that it would acquire the marketing analytics company Datorama for $800 million brought renewed attention to martech industry acquisitions – but such blockbuster deals aren’t the only way to leverage the immense benefits of an acquisition. Acquisition strategies can have many objectives ranging from merging market leaders to attaining new technologies at a lower cost. No matter a company’s motivation, the key to success is establishing a well-defined, value creation acquisition plan. A company should acquire another company only when they know they can do one of the followings things: improve the target company’s performance, reduce operating costs or improve margins of a newly acquired company, increase production of new capital or invest in winners early to help them develop their businesses with the parent company’s capabilities.
My company has seen its acquisitions accelerate in recent months, offering an illustrative case study. In the past two years, Webpals Group’s parent company has announced $27.2 million in acquisitions, including the purchase of InvestorJunkie.com, MoneyUnder30.com, Greedyrates.ca and DoughRoller.net, among others.
These deals reflect a three-pronged strategy for driving growth and extending our reach. A strategy anchored by a focus on verticals, market leadership and technology offers a pathway for companies in the performance marketing industry to grow their businesses and unlock value for partners.
Finding your verticals
Achieving excellence across diverse sectors and platforms is essential to thriving in the performance marketing ecosystem. Acquisitions should either strengthen your company’s position within an existing vertical or provide a viable pathway to market leadership in another vertical.
Initial interest in a single industry is fine as your company gets off the ground, but it is imperative to not remain myopic after you have strong footing in an initial industry. By looking to other, tangential verticals and investigating the nuances within those new verticals, you can complement your existing work, making your work products stronger and more profitable.
Look for mature markets
Acquisitions of dominant companies and assets in target markets can help your company establish a foothold in new strategic markets. Which markets should you target? Look for mature markets with high-value customer bases, as well as emerging markets with high-growth potential. Asia and the Middle East-North Africa region represent particularly promising markets and positioning your company for leadership in such areas will often require investments in local branches.
Technology acquisition
Before pursuing an acquisition, it’s crucial to determine whether a second company boasts a unique technology that will serve additional business units within your organization, better serve your customers and propel revenue growth.
If another company features superior technology, acquiring it can prove a much more time- and cost-effective solution than investing significant time and resources in developing your own superior solution.
Companies that have developed unique, innovative, and user-friendly products – whether they’re personal finance tools, software, or gaming – can bring essential value-add to your operations. As McKinsey notes, acquisitions of such companies can help speed the delivery of their products to the market, giving them the boost they need to make an even bigger splash within their respective sectors. With more product sales come a wealth of customer data – a gold mine for marketers.
The three prongs of our strategy – verticals, markets and technology – provide an indispensable framework for marketers to evaluate their position within their sectors. Armed with these insights, they can develop fruitful strategies for growth and foster successful partner relationships. For many marketing executives, analyzing your company’s position through this prism will lead to the pursuit of new acquisitions. Whether you’re Salesforce or a scrappy startup, deals stemming from such a meticulously planned strategic process can propel your company to new heights of success.
Opinions expressed in this article are those of the guest author and not necessarily Marketing Land. Staff authors are listed here.
About The Author
Equipped with close to 15 years of experience in the online marketing industry, Inbal Lavi has been the CEO of Webpals Group, the world’s fastest-growing performance marketing company, since January 2014. Since taking the helm at Webpals, Inbal has overseen all three of the company’s major acquisitions: Dau-Up, MarMar Media and ClicksMob, as well as additional website acquisitions. Her career spans almost 15 years in the online marketing industry, with expertise in marketing strategy, operations, and P&L management. MarTechExec recently named Inbal one of the 50 Women You Need to Know in Martech, the only Israeli woman to make the list. Globes, the largest financial newspaper in Israel, selected Inbal as one of the top 40 young Israeli leaders for 2017. She holds a B.Sc. and an M.Sc. with honors in Industrial Engineering from Tel Aviv University.
This marketing news is not the copyright of Scott.Services – please click here to see the original source of this article. Author: Inbal Lavi
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