WPP’s Big Win With Buddy Media

There are those that turn their noses up at advertising holding companies dabbling in tech investments. WPP Group has been the most unapologetic booster of taking stakes in tech companies, with a roster of investments in at least a dozen firms.

The strategy has paid some dividends. The company said yesterday that it will see a $50 million return on the $5 million investment it made in Buddy Media in 2010, thanks to the recent $689 million purchase of Buddy Media by Salesforce.com. The profit is evidence of the potential financial upside for those agencies and holding companies willing to play venture capitalist.

It also serves as a counterpoint to WPP’s high-profile stumble as an investor with Spot Runner, the local TV-buying platform that WPP plowed $10 million into. WPP ended up suing Spot Runner in 2009, alleging its founders basically ripped WPP off.

Besides Buddy Media, WPP also has a stake in Say Media, mobile ad network Jumptap, and is currently evaluating one in video ad firm Videology.

As Digiday has noted, these investments continue to blur the lines between agnostic agent and supplier, and agencies are becoming increasingly incentivized to preference certain media and technology vendors over others in the interests of their own bottom lines.

Just days prior to the agreement of Salesforce’s Buddy Media acquisition, WPP announced it had selected Buddy Media as its “preferred social ad provider” and would begin rolling out its product across GroupM agencies including Maxus, MEC, MediaCom and Mindshare.

It’s unclear if that decision had any bearing on the closing of the Salesforce deal, but given the fact that it’ll result in a substantial stream of revenue from the agency group it seems feasible that Salesforce at least considered the WPP endorsement as part of its decision and valuation process.

WPP isn’t alone among its peers in seeing big returns from investments. Interpublic Group parlayed its early stake in Facebook into a $133 million profit in a sale for half of its shares.


More in Marketing

In the marketing world, anime is following in the footsteps of gaming

As marketers look to take advantage of anime’s entry into the zeitgeist, they might be wise to observe the parallels between the evolution of anime as a marketing channel and the ways brands have learned to better leverage gaming in recent years. 

With the introduction of video ads and e-commerce, Roblox looks to attain platform status

Roblox is expanding into more areas than just ads in 2024. Much like platforms such as Amazon and Facebook have transcended their origins to evolve from their origins as online marketplaces and social media channels, Roblox is in the midst of a transformation into a platform for all elements of users’ virtual lives.