Social media marketing company Brand Networks is announcing that it’s acquiring Optimal for $35 million in cash and stock.
Brand Networks co-founder and CEO Jamie Tedford told me that he sees the two companies as largely complementary. While Brand Networks is trying to address all of a company’s social marketing needs, Optimal has been “laser-focused on ad optimization and insights.”
“We think that the self-serve technology leader in the ability to get [return on investment] from media spend — there’s really no company that was doing it as well as Optimal,” he said.
This is an area where companies like Salesforce.com have been making acquisitions. In fact, when Brand Networks raised a $68 million round (its first outside funding!) earlier this year, Tedford cited the need to compete as an independent company against bigger competitors – so the acquisition also helps Brand Networks by growing its headcount.
“There is a race to scale, if you will,” Tedford said. “Not scale for scale’s sake, but scale to help the biggest brands and biggest agencies as social becomes more important, more measured, and more measurable.”
Optimal founder and CEO Rob Leathern (pictured above) will become chief product officer at Brand Networks, and he said the entire 40-person Optimal team will become part of the combined company, resulting in a combined headcount of around 175. Optimal is headquartered in San Francisco, while Brand Networks is based in Boston, so Optimal is supposed to become “the hub” of the company’s West Coast operations.
Founded in 2008, the smaller company was previously called XA.net, but eventually took on the name of its optim.al social ad campaign manager. It says its advertisers include Gucci, Sephora, JustFab. and Gilt Groupe, plus it recently won the grand prize in the Facebook Preferred Marketing Developer Innovation Competition.
Optimal has raised $5.1 million in equity (I reported on a $7 million Series B earlier this year, but Leathern said $2.5 million of that was debt from Silicon Valley Bank) from investors including Neu Venture Capital, DoubleRock, The Social Internet Fund, Siemer Ventures, Signal Ventures, and James Altucher (who’s a columnist at TechCrunch).