• by Mark Naples , December 2, 2004

Unless you've been under a rock, you've probably heard or read about Viewpoint's acquisition of Unicast, which was announced Thursday morning. It's a rare event when industry specific coverage of a deal in our space is dwarfed by its coverage in The New York Times. But, that was the case Thursday, when Nate Ives gave it almost 650 words in the Advertising section with the headline "More Evidence That Internet Marketing Is Hot Again."

Is that really what this acquisition implies though? Does the purchase of one of the industry's oldest and most respected rich media/video providers by another respected, much larger, publicly traded company in a complementary space - at a curiously low price point - directly mean that the industry we all play in is "hot"?

First of all, any questions about the price - and there have been many in the blogs and list servs of our business - can only be answered with speculation until the filing of the appropriate documents to the SEC sometime after the deal is completed, which means we'll have to wait until January to learn why the announced price was so seemingly low.

Publicly traded Viewpoint's stock is up almost 15 percent on the news. So, I'm going to leave the financial considerations to that notation only, i.e. let's wait until January to see the details before making any assertions.

The first question I asked myself was how many clients these companies had in common, and whether or not it was a driver in the deal. "The complementary nature of these two companies' businesses and our overlapping client base was a big part of this - absolutely," said Unicast's spokesperson Allie Savarino.

Savarino reported that 80 percent of Viewpoint's clients also worked with Unicast, and that the overlap included a cross section of agencies and brands that were very high-end, from Miller Brewing and Honda, among other brands, to Starcom MediaVest Group and Carat among the agencies.

It's important to understand that while the clients overlap, one company (Viewpoint) has a strong foothold on one side of our business (video marketing on sites) and another (Unicast) has a strong foothold on another side of our business (delivering video advertising).

This deal isn't so much about consolidation between two players in one segment, it's about bringing two segments of our business - that are regarded as one segment by most brands and agencies - together under one roof. It's less about the usual kind of industry consolidation and more about campaign consolidation for brands and agencies, primarily those who leverage video and other rich media.

"For example, Honda has been working with Viewpoint for their site content and with us for their advertising. Instead of going to multiple vendors, now a company like Honda has all their online video needs met in one place," said Savarino.

To me, such consolidation within a given segment makes sense. But other companies in the interactive marketing world have brought together multiple service segments under one umbrella in an attempt to cross-sell. This has brought mixed results with some successes and some colossal failures.

For my money, what this acquisition means goes beyond even such tactical concerns as becoming a one-stop shop for brands and agencies that want all their interactive needs met under one roof. This deal tells me loud and clear that the consolidation to be watched in the next year is not between and among companies in our space; it's between video content on sites and video content in ads online, with an eye toward video content on television and even in theaters. Watch the companies that can deliver the quality of video that we expect in broadcast to the desktop for premium brands and within interactive video ads served online.

The new Viewpoint is now poised to do all of this with the kind of success they've been enjoying for major brand sites. So, other companies that can hum both tunes - leveraging broadcast quality video assets on brands' Web sites and in serving the ads - also bear watching.

Jupiter's Nate Elliott sees the online video market rising by a factor of five by 2009. If broadband penetration continues to grow, and more cities get Wi-Fi service (see next week's column), his projections may come true in half that time.

So, to answer that initial question I posed against the The New York Times' headline, the answer is a resounding "yes," but perhaps not for the reasons many observers seem to think. This isn't about getting the companies who already use video online to do more of it.

For my money, the real juice here is in the supposition that this deal and others like it to come, in addition to changing business models of others in and around these complementary spaces, will accelerate the number of companies that advertise on television coming to the Web. We'll see.