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It is official: Tesco’s dunnhumby acquires Sociomantic

  • New solutions to provide relevance for more than a billion consumers worldwide
  • Partnership unlocks new levels of personalisation to revolutionise digital advertising: Thomas Brandhoff, Sociomantic

After weeks of speculation, the official word is in on a marriage that should make an impact on digital advertising. dunnhumby, a customer science company and wholly owned subsidiary of Tesco, has acquired Berlin-based ad tech firm Sociomantic Labs. Even as the terms of the deal are not disclosed, it is understood that price of the acquisition was being discussed at USD 200 million.

An official statement explained that dunnhumby will combine its insights on the shopping preferences of 400 million consumers with Sociomantic’s intelligent digital-advertising technology and real-time data from more than 700 million online consumers to improve how advertising is planned, personalised and evaluated.

In a company blog, Thomas Brandhoff, Managing Director and Co-Founder of Sociomantic, commented, “We’re very excited to announce that through the acquisition of Sociomantic by dunnhumby we’ll be able to deliver on the promise of personalised one-to-one marketing at a global scale. This partnership will help bring smiles to the faces of more than a billion consumers around the world by delivering the right message to the right person based on the strength of our combined technologies, data and insights.”

The two companies state that with this partnership, marketing content can be dynamically created specifically for an individual in real-time based on their interests and shopping preferences, and delivered across online media and mobile devices.

“Our strategic priority is to engage consumers and earn their loyalty wherever they shop, in-store and online, with personalised communications that are valuable and meaningful. Applying this approach to make online media a better experience for consumers and marketers is paramount to us. Our observed campaigns to date have shown that increased relevance leads to significantly better engagement and response rates. Doing that at a scale of more than a billion people is unprecedented,” said Simon Hay, CEO of dunnhumby Ltd in a prepared statement.

dunnhumby and the work that it has done for Tesco’s retail business through its loyalty programmes such as the Clubcard are an indication of the early expertise that the company has built in using analytics to customise messaging. This application of intelligence towards making personalised offers to customers is the very space that Sociomantic is working in. The coming together of the two companies would enable each to learn from the experience of the other, and augment their individual offer.

The client list of the two companies also has a minimal overlap in the current state. dunnhumby works more with FMCG players such as Procter & Gamble, Coca-Cola and US retailer Kroge amongst others. Sociomantic on the other hand, as is the case with most players in the retargeting space, is engaging ecommerce companies. This development should help accelerate the adoption of programmatic for sectors such as FMCG which have otherwise been slow to react to technology based targeting solutions.

From a geography standpoint too, the acquisition of Sociomantic would give Dunnhumby access to new markets including growth markets.

“Consumers want to see ads for the products and offers they care about. Marketers have an opportunity to benefit from the vastly improved response rates and ROI that come from more relevant ads. This acquisition means that retailers and brand owners will be able to harness deep customer insights to drive relevant messaging, campaign execution, and evaluation, improving the experience for consumers and the results for marketers,” said Dave Balter, Global Head of Investments, dunnhumby.

Sociomantic Labs GmbH is a global player in programmatic digital advertising solutions. The company employs more than 200 professionals in 16 offices worldwide with over USD 100 million in revenue in 2013, working with brands in electronics, retail, fashion and travel services in more than 60 markets spanning six continents. Sociomantic’s talent, technology and experience is expected to immediately expand dunnhumby’s strategic footprint, global reach, and client portfolio.

dunnhumby celebrates 25 years as a customer science company this year. Having first reinvented the grocery loyalty program in partnership with Tesco’s Clubcard, cited as one of the most successful loyalty programs in the world, dunnhumby now analyses and applies insights from more than 400 million customers around the world.

Stella Advisors LLP is acting as exclusive financial advisor to dunnhumby in connection with the transaction.

Noor Fathima Warsia

A veteran journalist in the Indian marketing, media and advertising fraternity, Noor Fathima Warsia took on the role of Group Editor -– APAC for Digital Market Asia in May 2013. Noor has focussed on tracking trends and developments in the Indian media industry.