• by December 22, 2004

Aegis Group, the UK-based holding company that owns Carat, today said it's acquiring iProspect, a provider of search marketing services; the deal is estimated at $50 million. The move is yet another sign that big marketing services companies are serious about keeping search services in-house, and are no longer leaving potential revenues derived from offering those services at the table.

JupiterResearch estimates that search advertising and related services will outpace other segments of online advertising growing from $2.6 billion this year to $5.5 billion in 2009. Search accounts for more than 30 percent of online advertising spending in the United States.

iProspect will live within Aegis' Isobar unit, the holding company's newly formed global network of digital agencies. The Isobar network will deploy iProspect's proprietary bid management technology within its U.S. agencies Carat Interactive and Freestyle Interactive, and is also expected to deploy globally. Isobar will run the 85-person iProspect as a stand-alone brand, according to Sarah Fay, president of Isobar in the United States.

Carat Interactive has offered search services to its clients for some time, "We have a very good search capability through Ron Belanger's group and we fully intend to continue to help that group grow," Fay says. "It's not so much that anything was missing, but we've done exhaustive technology reviews for pay-per-click tools and we have not landed on any one provider that does everything we need. We see iProspect's iSEBA [iProspect Search Engine Bidding Agent] as providing what we need." Carat Interactive has been outsourcing paid inclusion services for its clients; it provides organic search services on its own.

The iProspect tool enables pay-per-click search advertising, bid management, campaign tracking, and reporting. "The issue for Isobar is that there aren't pay-per-click tools in many countries outside of the U.S., so this is an opportunity to develop iSEBA for use in other countries," Fay continues.

The acquisition "allows us to get big quicker," Fay says, noting that Isobar is the first player in the full-service digital space to incorporate a big search practice. "I've almost never seen such a systematized company of this size." The acquisition will also make it easier to get personnel trained quickly with respect to search services. Fay and other digital media executives have scrambled to find ready-made search talent this year. Meanwhile, Fay is also hoping that the iProspect acquisition will help bring clarity to Aegis' Isobar proposition. The acquisition marks Isobar's first foray in the U.S. market; it's the seventh for Isobar globally in the past six months. Isobar has more than 20 digital brands globally. Fay says the reason for grouping full-service digital capabilities under the Isobar umbrella is because Carat has always been viewed as a media agency.