UPDATE: June 18, 2019: Ycor dropped its bid to buy Sizmek's ad server and dynamic creative optimization assets, according to court documents filed on June 17. The news comes less than two weeks after Ycor, Publicis Chairman Maurice Lévy's personal holding company, topped Amazon's offer. The court documents reveal that while Ycor offered to raise its initial bid by at least $15 million, Sizmek ignored Ycor's requests for information and "had selected their preferred bidder." The documents don't include the final sale price, though Adweek sources speculate it was between $30 million and $50 million.
UPDATE: June 11, 2019: This story has been updated to clarify analyst commentary shared by Forrester in regards to Ycor's relationship to Publicis Groupe and Publicis' M&A activity for 2019.
UPDATE: June 7, 2019: After this article's publication, a Sizmek spokesperson provided the following comment to Marketing Dive: "We've signed an agreement for Amazon to acquire Sizmek's ad server and DCO assets and are seeking expeditious Court approval of it. We are respectful of the Court-supervised sale process and will provide more information to stakeholders when appropriate."
- Ycor, parent company of the data marketing firm Weborama, has topped Amazon's bid for the ad server and dynamic creative optimization (DCO) solution of Sizmek, according to a press announcement. Financial terms of the offer, which Ycor and Weborama said they have been considering for two months, were not disclosed.
- With the move, Ycor intends to build an "independent, neutral and transparent" ad server, one that can act as an alternative to "dominant offerings." Sizmek's ad server is the second largest in the world behind Google's Marketing Platform.
- Amazon late last week confirmed that it had entered an agreement to acquire Simek's ad server and DCO, while not sharing financial details of the deal, which has not officially closed. The online retailing giant said that it would keep the assets separate from Amazon Advertising, while noting that its ad unit and Sizmek "have many mutual customers." Sizmek, a once-hot ad-tech firm, entered Chapter 11 bankruptcy proceedings earlier this year and has been selling off core parts of its business since then.
Ycor allegedly topping Amazon's bid for the ad server and DCO of Sizmek threw a surprising fold into a situation many in the media and ad industry at large had been treating as a done deal. Ycor claimed it was looking to avoid a situation where two tech giants — Amazon and Google — own and operate the industry's two largest ad servers.
"[G]iven how incommensurate Amazon's resources are, it can bring 'David versus Goliath' to mind," Alain Lévy, CEO of Weborama and a partner at Ycor, said in a press statement. "Today, we make a financial commitment, taking into account what is at stake for the industry as a whole: prevent the advent of a duopoly."
However, questions linger as to why Weborama parent Ycor — not a widely recognized name — bid for Sizmek's assets and how the two would have work together.
"This move is a real surprise, as Weborama shifted focus from adserving to data management and data aggregation a couple of years ago," Hugo Loriot, managing director of the data consultancy 55, said in emailed comments to Marketing Dive. "I'm not sure Weborama would help Sizmek grow and apart from helping them scale in the US, I'm not sure Sizmek is a valuable addition to Weborama."
Ycor is also the personal holding company of Maurice Lévy, the chairman of agency giant Publicis, per Mediapost. Ycor describes itself on its website as a "new breed of technology startup," one that's focused on data-driven solutions and bleeding edge technologies like blockchain and artificial intelligence.
The connection between Publicis and Ycor isn't tangible enough to suggest that Lévy and Co. are building out some sort of comprehensive ad-tech network. Publicis is already busy integrating other tech offerings, like Epsilon and its PeopleCloud platform, and any competitive advantage the network would have gained from Ycor owning Sizmek's assets is unclear, Jay Pattisall, a principal analyst at Forrester focused on the agency business, told Marketing Dive.
"Given that relationships with third-party ad servers are common practice, Publicis Groupe having a relationship with Sizmek's owner, whomever that is, would not result in a competitive advantage for an end-to-end media offering," Pattisall said in emailed comments to Marketing Dive.
But one reason Ycor might have bid for Sizmek's ad server and DCO is because Publicis has potentially burned through its M&A budget for the year, Pattisall speculated. Publicis purchased Epsilon for $4.4 billion in April, a price tag roughly twice previous estimates of the data marketing firm's value.
"It's not likely Publicis Groupe will pursue further M&A in 2019 given the sheer size and recency of its Epsilon acquisition," Pattisall said. "Consequently, Sizmek's ad server business will be pursued by Amazon, Ycor and others."
If Ycor had bought Sizmek's ad server and DCO, those products would have still likely operated fairly independently and served a broad client base, per Pattisall. That would have probably been true under Amazon as well, hence why Amazon said it would keep Sizmek assets separate from Amazon Advertising for the time being. IPG has enacted a similar strategy with Acxiom Data Marketing Solutions following its purchase of the division for $2.3 billion last year.
For now, the ball is in Amazon's court in regards to a Sizmek deal. The news signaled the start of a potential bidding war between Ycor and Amazon, as the latter is highly unlikely to give up on acquiring desirable technology assets that could help it further capitalize on its already-booming ad sales business.
"It sounds like a lot of the story is just the battle between Amazon and another suitor," Pattisall said.