NEW YORK WPP Group and Omniture have concluded a collaboration agreement through which the holding company will invest $25 million in the analytics firm.
The firms agreed to work together on product development, with WPP shops like OgilvyOne, Wunderman, Enfatico, GroupM and 24/7 Real Media participating.
The plan calls for WPP in 12-18 months to shift its own technology and data products onto Omniture’s platform. This includes 24/7’s ad-serving systems and TNS’ data collection platforms.
The agreement is a testament to WPP CEO Martin Sorrell’s belief that ad holding companies must branch out beyond their traditional expertise in media and creative. (WPP spent $649 million to buy ad serving firm and network 24/7 Real Media in May 2007.)
“In the current economic environment and as clients continue to experiment with and develop their online budgets, the need for better analysis, measurement and focus on return on investment is more important than ever,” Sorrell said in a statement.
WPP bought 2.8 million units of Omniture common stock at $8.76 per share. Based on Omniture’s outstanding shares, WPP will own about 3 percent of the company.
Omniture’s shares this morning opened at $9.44. The firm also issued a warrant giving WPP the option to purchase more shares if undisclosed performance objectives are met.
As part of the agreement, WPP agencies will train 500 employees to use Omniture’s analytics products, and Omniture will seed consultants inside WPP companies.
Orem, Utah-based Omniture is one of the top Web analytics firms in the industry, enlisted by advertisers and agencies to parse the effectiveness of their marketing and Web activities. Its 5,000 customers include eBay, Wal-Mart, Microsoft and General Motors.
Already 30 of WPP’s top 50 clients use Omniture products, according to Mark Read, director of strategy and CEO, WPP Digital.
“Measurement is increasingly important, and analytics is important to what we’re doing. Providing clients with measurable ROI and optimization is critical for us to do,” said Reed.
Read said the gloomy economic environment was not a reason to put off investments that help WPP keep up with the changes brought on by technology melding with advertising.
“In one way you could argue it’s absolutely the perfect time to make this kind of investment,” Read said. “I think we’re trying to run the business for the long term. Our view is this absolutely the right time.”
Josh James, CEO of Omniture, said linking up with WPP would help solve a long-time headache for analytics companies: getting clients to fully use the data generated.
“The No. 1 thing people ask for is to teach them use it,” he James. “They can help our customers make more money off the data. It’s one thing to have the data, it’s another to use it.”
WPP’s investments include ad networks Videoegg and JumpTap; online community builder LiveWorld; and online TV buying platform SpotRunner.