• by Dean Vegliante , Op-Ed Contributor, April 17, 2014

The ad tech industry is always simmering with activity, and has been particularly active with M&As lately. This is (usually) great news for investors, executives, and similar companies and technologies that benefit from a valuation boost. But in ad tech, and especially programmatic, the untold story is what happens to clients.

Client composition is a critical piece of the valuations and terms during acquisition negotiations. However, once the focus switches to integration, tech and people move to the fore, with clients taking the back seat. Integrating a product is a herculean task. In an industry that promises real-time results and data, even a yearlong integration can feel like several lifetimes. For clients to succeed following an acquisition, they need to understand the motivation and the possibilities of the deal.

Let’s group M&A deals into three scenarios:

1. The land grab or double-down: Two companies in the space combine, or a big company buys a smaller one to gain market share and/or access to a new geographic territory. 

This situation is a clear chance for the acquirer to gain access to a new set of clients and partners while taking out a competitor at the same time. As an example, Ensighten recently purchased Tagman.

These transactions make sense, but if I am on the client side of that table, what does this kind of deal do for me?  Usually the acquired-side client is gobbled up into a bigger system with new processes and workflow to deal with, and the consolidation could possibly lead to higher rates.

2. Whitespace: When a company acquires a complementary business to fill in one of its existing soft spots and help complete a strategic vision.

The benefit of filling in the whitespace is that the whole is often greater than the sum of the parts. For a marketer, this is the best-case scenario, because it should allow the two companies to grow with each other, offering better products and services. Examples of this kind of acquisition are Dstillery (formerly Media6Degrees) buying Everyscreen Media to get into mobile, and IgnitionOne purchasing Knotice for the DMP and email capabilities (full disclosure: Netmining is part of the IgnitionOne Group).

3. Random: A big company makes an acquisition just because it can.   

Sometimes acquisitions leave you scratching your head, such as Microsoft buying Aquantive, Google purchasing Motorola, or HP buying Palm. Yes, these could be profitable business lines, but it’s not evident that they need to be part of one greater company. Often you’ll see the acquired company shut down a few years later. This situation was common during the dot-com bubble and is less than ideal for clients.

There is uncertainty for  incoming clients even in the best-case scenarios. The best that can happen is a warm welcome with new, complementary products and services that add value to the relationship. Marketer clients also need to hope for continued relationships with their day-to-day contacts (there's always the chance of employee cash-outs).

The worst possibility is that an advertiser’s trusted partner is shut down as a direct result of a sale. That forces the marketer to sign on with another set of partners to maintain their programmatic operation, which means new products, work-flows, and people.

There are plenty of great successes to dispel any doom and gloom, but clients should always do their due diligence and seek out answers for the following:

• Which of the three acquisition scenarios is this?
• What will change in the near- and long-term?
• Will my client-facing teams change?
• Does my contract automatically get assigned to the new entity?

The final piece is culture and client service. Each company has its own DNA that attracts clients. It’s very hard not to change that DNA during a big acquisition, and there is no magic bullet for transposing culture from one entity to another. The best advice for marketers is to do their digging and always maintain a few programmatic partners in a testing pattern. If things start to decline, find a new home for the business.