By Shira Ovide
Oracle Corp. on Monday agreed to buy startup Datalogix Holdings
Inc., an important advertising partner to Google Inc. and Facebook
Inc. The deal shows how big software companies are refashioning
themselves into marketing powerhouses.
Datalogix is working with Facebook, Google and Twitter Inc. to
prove that ads bought on their websites propel people to buy the
advertised products in brick-and-mortar stores. Datalogix does this
by matching information about Facebook or Google users with
retailers' email databases and in-store purchase histories.
Datalogix said it has 650 customers, including Ford Motor Co. and
Kraft Foods Group Inc.
The deal spotlights the billions of dollars of acquisitions
struck by Oracle, Salesforce.com Inc. and Adobe Systems Inc. as
they increasingly target corporate marketers. The software titans
are motivated by the growing role of technology in crafting
personalized sales pitches for consumer products such as soda, cars
or movies.
"Marketing services increasingly depend upon the integration of
technology and data. Oracle and Datalogix bring each what the other
most needs to thrive," said Jon Elvekrog, chief executive of
advertising-targeting firm 140 Proof.
Oracle has acquired four major marketing-tech companies in the
last two years. This year, Oracle closed its purchase of BlueKai, a
startup that lets marketers track Web-surfing habits to target ads,
and a $1.6 billion purchase of Responsys, which tailors email
marketing. Last year, Oracle bought marketing-services firm Eloqua
for about $935 million.
Oracle didn't disclose what it agreed to pay for Datalogix.
Bryan Wiener, chairman of digital-ad agency 360i, said the
software giants have promised to do a better job of showing that
Web ads influence in-store sales, but the promise hasn't panned out
in many cases. "It's an open question: Can these large providers
make these acquisitions and not stifle innovation?"
Marketing executives say Datalogix, known in the industry as a
data broker, has a valuable trove of information about people's
shopping habits, gleaned from loyalty cards and other marketing
programs. The purchasing data helped attract the attention of
Facebook and Google, which have started working with Datalogix and
others data brokers to allow advertisers to target users based on
the data brokers' information.
Marketing executives say there isn't much potential for conflict
between Datalogix's new owner and Web giants such as Google and
Facebook, in part because those companies already work with the
marketing-services arms of Oracle and Salesforce.
As Oracle and others assemble troves of marketing data, their
offerings could serve as a counterweight to the power of Facebook
and Google. Marketers say they worry about the duo's control over
both growing stockpiles of information on consumer Web-surfing
habits and their growing share of online ad spending.
"It might be interesting how [Oracle] could put a check to
Google and Facebook attempts to dominate the ad space with data,"
said Matt Ackley, chief marketing officer of advertising software
firm Marin Software Inc.
But the acquisition has the potential to draw Oracle into
increasing regulatory scrutiny of how Datalogix and its peers
collect and use consumer data. Earlier this year, the Federal Trade
Commission said Congress should consider legislation to require
data brokers to provide better information to consumers on what
data they have, and to give consumers the option to exclude their
personal details from use by marketers. "Lack of transparency and
choice remain a significant source of concern about this industry,"
the FTC said in May after examining nine data brokers, including
Datalogix.
Privacy-advocacy group Center for Digital Democracy on Monday
said the FTC should review the proposed Datalogix deal for its
potential impact on consumer privacy and competition for consumer
information.
The proposed acquisition also means Google will be working more
closely with Oracle on advertising, even as the two companies are
in a legal fight over Google's Android mobile-operating system. The
Supreme Court is weighing whether to hear a case involving a
copyright dispute over computer code owned by Oracle and used in
Android.
Oracle declined to comment, and Datalogix referred inquiries to
Oracle.
The acquisition also is a turn of strategy for Datalogix, which
earlier this year began working with investment bankers to decide
whether to conduct an initial public offering of its stock. This
year, however, was a rocky one for many public marketing-technology
companies. Share prices of Rocket Fuel Inc. and Datalogix
competitor Acxiom Corp. have fallen sharply in 2014, for
example.
Rolfe Winkler, Mike Shields and Elizabeth Dwoskin contributed to
this article.
Write to Shira Ovide at shira.ovide@wsj.com
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