In case you missed the headlines last week, UK cashback websites TopCashback and Quidco unveiled the news that the two parties could potentially merge as part of an agreement to create a singular global publisher group (CB Group Holdings) within the money-saving cashback industry.
With both companies having millions of members worldwide earning cashback on shopping activity respectively, the agreement to join forces could only mean good news for the channel. According to the official statement from owners Top Online Partners Group and Maple Syrup Group, both publisher brands will continue to function independently of each other in order to preserve the focus of their own members and growth each business has achieved.
While the thought of one global publisher group sounds very promising, the overall view from the industry has caused some split opinion, with competition and strategy the prime factors, and whether this potential monopoly could outstrip revenue streams already in place from other publishers, networks, and advertisers.
"Top Online Partners Group and Maple Syrup Group would simply be creating an umbrella company that would sit above the existing brands. If it goes ahead, the agreement would see a new global group formed, with the potential to provide significant new money-saving opportunities for current and future members across the world," Quidco told PerformanceIN.
“There’s a sense in the industry at the moment that this merger could become a dominant leader, meaning greater powers and resources at its disposal when it comes to negotiations and transactions within the channel. What does this necessarily mean for the advertisers and networks already engaged with the two publishers? Would the merger set its own agenda on cashback deals, form its own network and cut out the middleman entirely?” said Mustafa Mirreh, senior digital journalist at PerformanceIN.
“As far as we know, it’s business as usual for both companies and only time will tell whether this could initially impact the competition and revenue streams for affiliates.”
David Hall, head of publisher development, Europe at CJ Affiliate by Conversant said that if the merger is approved by the Competition Markets Authority, it will depend entirely on the strategy adopted merger organisation.
“Almost immediately, we’ve seen advertisers asking questions: does this mean that the two propositions will now share exclusive offers? Will the same team negotiate share rates? And will that drive an increased cost for the same volume of transactions? Or on a brighter note, will the economies of scale be passed on to advertisers, perhaps resulting in a cost saving per transaction?” commented Hall.
“I see value for the two propositions in being able to better differentiate themselves to clearly defined audiences, thus increasing their appeal and reach for their partners. With more sharply defined audiences, advertisers can expect to see greater relevance and potential to better target consumers,” he continued.
Meanwhile, Webgains’ director of international publisher relations Ami Spencer commented that this news is nothing out of the ordinary, with several positive examples within the publisher space having already surfaced over the last 12 months.
“The merge between Topcashback and Quidco, if approved, will see two of our largest UK publishers join forces. Although in the short term this could enable inflation on tenancy packages for clients, it’s unlikely this will have a long-term negative impact,” said Spencer; “We may see new partners enter the space if it becomes clear that there is demand or a competitive space within this vertical, as well as existing publishers evolving their model to include cashback. Ultimately this will still lead to a competitive publisher landscape."
RevLifter co-founder Simon Bird, whose company has been making an innovative impact in the discounts and incentives sector added that the merger will indeed help the newly formed group to compete with larger players globally but warned of the challenges that could lie ahead.
"Mergers and acquisitions are becoming an increasing trend as the affiliate market continues to consolidate – especially in the discounts and incentives sector,” said Bird. “The new group, CB Group Holdings, will have an interesting challenge ahead of themselves convincing consumers and retailers alike they can continue to operate the brands with their best interests in mind and avoid the temptation of taking advantage of their market power.”
At a time of intense scrutiny within the industry, Awin's global client strategy director Kevin Edwards stated that both the merger of Quidco and TopCashback can help build positive and engaging consumer experiences.
“Anything that strengthens and expands that role should be seen as a positive but they will clearly need to ensure their enhanced position doesn’t throw the finely balanced publisher/brand relationship out of sync,” he said.