• by Gavin O'Malley  @mp_gavin, April 26, 2007

Analysts don't quite know what to make of reports this week that WPP is pursuing 24/7 Real Media in the wake of Google's agreement to buy online ad giant DoubleClick.

24/7 might make a nice addition to WPP's portfolio of "interesting" marketing companies, said Gartner Research analyst Andrew Frank, but expecting synergies between 24/7 and WPP's existing roster of companies is another matter.

"Google's interest in DoubleClick is its relationships with agencies, but WPP obviously doesn't have that problem," said Frank. "And comments [WPP Chairman-CEO] Martin Sorrell is making about the DoubleClick deal lead me to believe he's a little confused about the advantages of owning an ad network."

Discussing Google's planned $3.1 billion acquisition of DoubleClick with the Times Online last week, Sorrell said: "It raises issues as to whether we are happy to let Google have our clients' data and our own data which Google could use for its own purposes."

Responded Frank: "Ad networks have data privacy rules, and the data DoubleClick collects belongs to its clients, not DoubleClick. Maybe Sorrell is only concerned about WPP's clients, but there are clear limits to what he could do with 24/7's data."

Said Forrester Research analyst Charlene Li: "It does seem like it could be a conflict of interest," adding: "But it might make sense if WPP is only interested in using 24/7's services for its clients."

Investment bankers eyeing the would-be deal said it is not at all unlikely, despite the fact that they've never seen anything like it."

"This is something really new," said David Clark, a managing director with investment banking firm Jordan, Edmiston Group, Inc. "This would mean WPP breaking out of its agency role into an operator's role representing clients' campaigns."

Citing unnamed analysts, The New York Post on Wednesday estimated 24/7 Real Media could "fetch upwards of $600 million, or at least three times the company's annual revenue," although it said the asking price could be a lot higher, based on recent deals for Internet advertising companies.

"I think there's a good chance that number could get bid up by others," Clark said, but he declined to speculate on potential rival bidders.

Is the newness of the potential deal a good thing or a bad thing?

"I wouldn't say it's good or bad, but it's different in a way that might be required if it means remaining relevant to clients' overall ad spend," Clark said.