According to Awin, the acquisition could set in motion a future Initial Public Offering (IPO), an announcement that was returned by a 4.3% hike in Axel Springer stock. At the same time, however, concerns arose over the future of affilinet and the potential market dominance Awin would achieve as a result.
In efforts to shed more light on the deal, PerformanceIN spoke to Awin CEO, Mark Walters (pictured centre, between CTO Peter Loveday and COO Adam Ross).
Hi Mark, what were the main motivations behind the merger with affilinet?
Mark Walters: affilinet and Awin share a similar ethos; a focus on service, ethics and technology, a desire to exceed expectation and an understanding that the ‘how and why’ people do this is also what counts.
Were motivations different for United Internet?
MW: As the shareholder of affilinet, United Internet could have just decided to divest and remove themselves from the affiliate marketing space altogether, but they didn’t. They sought to merge both entities whilst remaining a shareholder, with a vision to IPO the new combined group. This signifies their belief in the future of the model and the fact they very much want to be a part of it.
Was the decision to merge one that has been long in the making?
MW: It was a relatively quick process by M&A [mergers and acquisitions] terms, approximately eight months. Once the obvious similarities and shared future were understood it became a much easier process centred less around the how and more about the when.
What impact will the merger have on existing affilinet employees and activity?
MW: Naturally, due to the size of the deal we will be required to await anti-trust authorisation to proceed. So, whilst the deal has been signed it’s not officially closed and so both companies will continue to work as before. Post the ruling we aim to communicate, meet and engage with all staff to share our vision and align our operations. Without a doubt, the affilinet team will add to our culture and help us to achieve our goals, short, medium and long term.
In the UK especially, affilinet has been a close competitor to Awin. Why the move to join forces now?
MW: It’s certainly not the first time that two ‘competitors’ have joined forces to offer something cleaner, better, faster or wider reaching. It was the same step we took with the acquisition of buy.at. In both cases, we were seen as such close competitors because - brand name aside - we were so similar in our approach and desire to build value into the channel. Why now? The opportunity presented itself, nothing more.
What additional capabilities and benefits will Awin acquire as a result?
MW: Without sharing the secret sauce or contravening anything until post antitrust authorisation; we will broaden our operating base in Europe, secure a host of fantastic advertisers and with that some very experienced staff to help with our plans for delivering growth and value creation.
With 15 offices around the world, Awin is clearly matching its ambitions for global expansion. Does the company yet have a game plan for entry into Asia?
MW: Our strategic alliance with Commission Factory was not just to secure our reach into Australia, which is now growing at a phenomenal rate, but also to pave the way for our formal entry into Asia. We are already doing a significant amount of trade in the region so it makes sense to expand there.
The merger will put Awin in a dominant market position, particularly in Europe. How would you quell concerns that it could pave the way to a “monopoly”?
MW: Competition drives us so, like others, we would consider a monopoly to be a bad thing for the industry. Advertisers should have plenty of choice and, if you look at the landscape in the UK and DACH region, that choice is as rich and diverse as ever. There are at least five alternative ‘traditional’ networks as well as SaaS [Software as a Service] providers all vying for advertiser attention. We know we can only win and retain business by being the very best at what we do, that’s always been our ethos and this doesn’t change things. We recognise our responsibilities as market leader more than ever and promise to use our influence and position for the good of all our partners.
On the publisher side, monetisation options and choice is in abundance, we couldn’t be further from a monopoly. If anything, we need to significantly simplify affiliate marketing to attract a broader range of publishers. We have big plans in this area and have recently been very encouraged by increased investment and attention by traditional media publications into affiliate marketing.
Since the news, one industry member has called Awin a “great British success story”. What have been driving forces to its undeniable success in a relatively short space of time?
MW: Firstly, I must congratulate that member on their intellect and insight! Seriously though, that’s something I would have hoped to have read a few years back about Affiliate Window. But Awin is now a truly global operation and, whilst the values may have stemmed from the UK, they are very much based on being common sense, partner-centric and value creating, and something acknowledged at every level and applied across all of our group. It’s a universal success story, it just so happens the current exec team have been together for almost 14 years and they’re British - and Irish.
Aside from that, it’s all about the people and we have been fortunate to work with some truly brilliant minds who are fully committed to the cause and make coming to work every day an absolute pleasure. As the company has grown, that team has developed, become international and improves every day. That’s all we could have ever hoped for.
How do this success and high-profile merger speak to the longevity and health of the global affiliate marketing industry?
MW: We are in rude health. This deal sees two large media entities doubling down on affiliate marketing, wanting a significant part in its future. That’s exciting and inspiring. In the long term, there are some challenges ahead, especially when it comes to GDPR, but this deal equips us well to meet those challenges and benefit from a new wave of publishers from social and traditional media. We are excited and look to the future with great optimism.