When TradeDoubler last week forked out £56m for The IMW Group, the parent firm of The Search Works and The Technology Works, the overwhelming reaction in the online sector was one of surprise.
The sale of The Search Works was not the surprise, as it had reportedly been in the shop window for some time, although executives there continually insisted that it was simply preparing for an initial public offer. The surprise was firstly the price paid for it - below many peoples' expectations - and, secondly, the identity of the buyer - TradeDoubler, a company steeped in what the company's chief executive William Cooper says is the "unglamorous" world of affiliate marketing.
Affiliate marketing is the process where websites that promote retail sites, or merchants, are rewarded for every sale they generate through their promotion. For example, if a user books flights on a travel website after clicking through from a comparison site such as Cheapflights.co.uk, a commission from the sale will be trousered by Cheapflights. TradeDoubler acts as an intermediary between affiliates, the likes of Cheapflights, and merchants, the companies looking to sell products. It also provides the technology for merchants to track everything to do with their brand online.
However, describing TradeDoubler as an affiliate network has Cooper squirming in his seat. Having spent the past 12 months telling the industry that TradeDoubler does more than just affiliate marketing (it also offers an ad network, campaign management and technology to assist marketers), Cooper can now say it with conviction.
Before the acquisition, 70% of TradeDoubler's revenue was generated through affiliate marketing. With the purchase of IMW Group, that figure will drop significantly.
Cooper is aware of industry opinion that the deal was a steal for TradeDoubler, but, unsurprisingly, insists that all parties can be happy with the deal.
"Some people think it's a snip, the analysts we've spoken to, especially," he says. "But in all good deals, there is something there for everyone."
Cooper, a former PR man, is excited by the prospect of TradeDoubler becoming a bigger player on the European stage. When we meet, he has just rushed from an hour-long address, his first, to The IMW Group and is heading to New York via Heathrow to tell other interested parties the details of the deal.
"We've always had the aim of being a leading digital marketing agency in Europe and beyond," he says. "Conservatively, the channels we can now offer advertisers access to account for 70-75% of all digital spend, and there are other interesting areas we're looking at."
Cooper says this with a knowing confidence he couldn't previously muster. He tried conveying that TradeDoubler had ambitious expansion plans before the purchase of The IMW Group, but he admits that there are more ears willing to listen now.
The purchase of The IMW Group also marks a turning point for TradeDoubler, which, just this year, looked as though it would become part of AOL. Cooper is happy to wave the £450m AOL bid goodbye and instead warns that TradeDoubler needs to plough on and avoid a post-purchase slump.
"Too many times I've seen companies reach this stage and lose six months as they sit back and then try to sort things out," he says. "We cannot afford to do that. We are a listed company and we've already had a bit of a hiccup with the AOL offer period earlier this year, which has led to a drag on our results. The fact is that it didn't value the company high enough and that chapter is now closed."
The new chapter begins, says Cooper, with the search for new business. TradeDoubler has a client list of 400 firms compared to The IMW Group's 65. The immediate aim is to provide extra services to firms already on board.
"These advertisers are already asking us to extend their advertising beyond the services we provide for them already," he says. "So immediately you have a lot of advertisers that are interested in these services."
That's not to forget the company's roots. Cooper insists that TradeDoubler's core business of affiliate marketing will remain key to what the company does.
"There is still massive growth to be had in affiliate marketing. Just not the triple digit growth we're used to. Some retailers get between 20 and 30% of their sales from affiliate marketing and that's not about to drop off a cliff."
With The Search Works comes clients such as Asda, Comet and Lastminute.com. Cooper expects a few further wins soon.
And with The Search Works still in the running for the £5m Sky search account, what initially looked like a good deal will fast become renowned as a bargain.
2007: Chief executive, TradeDoubler
2001: Various roles; including UK managing director, UK chairman and chief operating officer, TradeDoubler
2000: Sales and marketing manager, TradeDoubler
1996: Director, Tavistock Communications.