Buddy Media Raises $54 Million Fourth Round That Could Further Fuel Facebook Marketing Consolidation

In a move that could accelerate the consolidation of ecommerce, marketing games, and Facebook Ads API companies into Page management giants, Buddy Media has raised a $54 million Series D round of funding. The funding comes from late-stage investors GGV Capital, Institutional Venture Partners, Bay Partners and Insight Venture Partners. GGV, Institutional Venture Partners and Bay Partners and values the company at $500 million.

Buddy Media now has capital to acquire developers that can help its brand clients produce a direct return on social media investment, engage their fans, and efficiently run high-performing ad campaigns. The funding will also go towards building out its sales, support, and product teams,  and opening more  international offices.

Buddy Media has grown to become the largest of the Facebook Page management companies, helping brands run and promote their presence on the social network. The company succeeded by raising funding and scoring big name clients early, and now boasts hundreds of high profile clients, a team of over 200 employees, and European headquarters in London. Buddy Media raised a $23 million round in October 2010, part of which likely went to acquiring social ecommerce and analytics developer SpinBack in May.

An IPO could be in Buddy Media’s future as it recently hired Dennis Morgan as its chief financial officer, who helped led corporate finance for Yahoo! as it completed over $5 billion in acquisitions. GGV partner Jeff Richards will join the company’s board of directors, alongside Facebook’s first sales executive Kevin Colleran, who joined last month. The CEO of consulting firm MediaLink, Michael Kassan, will become Buddy Media CEO Michael Lazerow’s special advisor.

With time, Facebook has incorporated more native Page management functionality, and free tools have proliferated. Low and middle-tier Page management companies may face commodification of their services. However, Buddy Media’s focus on enterprise-level solutions is proving lucrative as the world’s biggest brands require advanced tools to apply the marketing spend they’re shifting shift to social.

Capital for Acquisitions in Ecommerce, Games, and Ads API

With plenty of cash on hand, Buddy Media could hire new product teams or acquire developers so it can widen and strengthen its service offering in verticals that emerging as important to Facebook brand presence.

It already acquired SpinBack, whose technology lets brands encourage sharing of ecommerce products and purchases, and track additional sales generated by these shares. Still, it could look to purchase a full-fledged ecommerce store, or the developer of apps that let users pay for purchases with Facebook Credits so clients can process sales from their Page a make a direct ROI. Potential targets include Beetailer, Zibaba, and Moontoast. Page management competitor and prevalent consolidation force Vitrue recently partnered with ecommerce developer Milyoni to gain access to these types of technology.

Marketing-focused game development is becoming more important to Page management as brands look to drive sustained engagement, exposure, and sharing. There are plenty of small game design houses ripe for acquisition that could bring their suite of games as well as their team to Buddy Media. GamesThatGive, which makes games that trigger charity donations when played, was acquired by Vitrue last month, and we believe this type of consolidation will become more common in the next year.

Perhaps the most important decision Buddy Media will have to make with its new funding is how to integrate with the Facebook Ads API, which lets tool and service providers programmatically access Facebook’s ads system to create, buy, manage, and track large scale advertising campaigns. Facebook ads help brands gain fans for the Pages, and the new Sponsored Stories ad unit is triggered by Page content and fan interactions, so having a combined Page management and Ads API solution is optimal for clients. Ads API tool and service providers can earn millions of dollars by taking a percentage of a brand’s total spend.

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