E-Mail Marketing Heats Up: ValueClick To Buy MediaplexE-Mail Marketing Heats Up: ValueClick To Buy Mediaplex

E-mail marketing is fast becoming the cornerstone of both customer-relationship management strategies and digital advertising projects. A report recently released from the Aberdeen Group says that between 1999 and 2000, E-mail marketing grew 270% and stands to generate $1 billion by 2003.

For a digital marketing firm facing declining marketing budgets in a slow economy, offering E-mail capability to clients is crucial not only in getting a piece of that revenue, but also in holding on to business already in hand. ValueClick Inc., a performance-based ad serving company (which delivers banner ads to Web sites and charges fees based on the number of clickthroughs rather than impressions), has seen that light. It secured a stronger foothold on the market when it announced it is buying Mediaplex Inc., an ad-serving company that also offers outgoing E-mail CRM services.

ValueClick is paying a 45% premium for Mediaplex, giving its shareholders about $43 million in ValueClick shares. Mediaplex will become a wholly owned subsidiary of ValueClick. At the close of the transaction, contingent upon shareholder approval, the combined company expects to have cash balances of over $150 million.

The deal mirrors the recent strategy of ad-serving behemoth DoubleClick Inc., which over the past few months has made a series of acquisitions to increase its strength in the E-mail delivery market. Last month, DoubleClick added 100 million monthly E-mail deliveries to its arsenal when it acquired MessageMedia Inc. for $41 million. The deal follows the April acquisition of FloNetwork Inc., another E-mail distribution vendor (which delivers information's newsletters). DoubleClick now delivers 600 million E-mails monthly for 240 clients.