Dentsu has acquired digital marketing firm Leapfrog Online in its latest move to bolster a fast-growing and lucrative performance marketing portfolio. Dentsu says that Leapfrog, based in Evanston, Ill., employs 150 people and brought in $30 million to $40 million in revenue last year. The companies declined to discuss the financial terms of the deal. The Leapfrog agency will be absorbed into digital search and performance marketing shop iProspect, which is part of the holding company’s Dentsu Aegis Network operations outside of Japan. Leapfrog offers iProspect technology that broadens its services. While iProspect can customize an ad experience based on what it knows about someone conducting an online search, it hasn’t been able to customize what the person sees on the brand’s landing page after they click on the ad. Leapfrog’s technology and data capability makes that possible, said Jeremy Cornfeldt, president of iProspect in the U.S. The deal “connects us to clients’ digital assets in a way we hadn’t been connected before,” he said. “We’re typically working with media dollars for paid search, social and display, and we’re doing SEO work. Now, we’re actually creating experiences that represent [a client’s] brand and build that relationship with the consumer.” Rather than only help a client optimize its search advertising, iProspect now might also customize creative experiences, which could mean a visual promotion or call-to-action. For example, two people who conduct the same search for a Times Square hotel, and click on the same hotel ad, will now see different visuals on the hotel’s site. If one is into sports, they may see a list of local sporting events, for example. The other, into theater, might see a list of local shows. The acquisition also bolsters a lucrative category for Dentsu Aegis. The network in the last couple of years has set its sights on shops with data and technology services that support performance marketing efforts. Performance marketing is often used to describe efforts that drive consumers to take certain actions, such as viewing a video ad to completion, clicking on an ad or buying a product. Globally, Dentsu Aegis completed 45 acquisitions in 2016, including data and analytics firm Cardinal Path and a majority stake in large customer-relationship-marketing firm Merkle. Leapfrog is also the third acquisition for iProspect U.S. in the past few years. Growth at agencies like Merkle and iProspect “far outstrips the growth in other parts of our business,” said Rob Horler, CEO of Dentsu Aegis Network US. Organic revenue growth for the entire Dentsu Aegis group in 2016 was nearly 6%, the company said. IProspect globally grew around 15%, and Merkle “was above that,” said Mr. Horler. Unless there’s a major new business win, “you’re not getting double-digit growth in traditional media and/or traditional creative,” said Mr. Horler. “Performance and data-driven marketing is growing much faster.” With all the investment in data and performance marketing, many of the group’s agencies have overlapping services. That’s OK, he said. “Fundamentally, Merkle, 360i and iProspect all do elements of performance and package it up in a different way,” he said. “If you look at our market share [in the U.S.], it’s still small. We can afford to have a bit of overlapping capabilities.” Write to Alexandra Bruell at alexandra.bruell@wsj.com Copyright ©2019 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Dentsu has acquired Leapfrog Online, a digital marketing company that last year generated $30-40m in revenue. Both companies are yet to confirm details of the deal.