SAS snaps up Veridiem for MRM

By Hannah Smalltree, News Writer 16 Mar 2006 | SearchDataManagement.com

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This all made the choice to buy the MRM functionality very easy for SAS, said Bober. The deal officially closed yesterday, subject to certain conditions, including the approval of Veridiem's stockholders. Both companies are privately held and would not disclose the financial terms of the deal. As a result of the acquisition, SAS hired 11 of Veridiem's workers.

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There is some overlap between SAS's existing customer intelligence platform and the newly acquired technology, but Veridiem offers some unique functionality, Bober said. Veridiem has particular expertise in MRM analytics, also called market mix modeling. Among other things, it offers a marketing simulator, an application that enables users to do "what if" analysis on how they are allocating funds across different marketing activities, Bober explained. SAS liked Veridiem's focus on indirect, "mass-media," marketing measurement, he said.

"Most of the vendors that are out there, SAS included, have focused on optimizing the direct marketing side of the house," Bober said. "With Veridiem as part of SAS now, we are unique in our ability to understand the relationship between all of the direct and indirect marketing activities and help marketers make better decisions.".

For example, a marketing professional could quickly analyze the potential impact of spending more on television advertising instead of print advertising. Usability of the tools was a key factor in the acquisition, Bober added.

"SAS knows the science backwards and forwards. What is unique to Veridiem is their ability to make those kinds of analyses easy to do by a marketer," he explained.

Robert Blumstein, research director at Framingham, Mass.-based research firm IDC, called the acquisition "mainly a marriage of functionality." MRM products like Veridiem's have been solving major pain points for marketers in the area of planning and budgeting, he said, and it makes sense to make these processes even more effective with analytics, a SAS area of expertise.

"The issue is how do you not just automate [marketing] functions and make it easier for a [chief marketing officer] to plan and manage the budget, but also, how do you interact with the actual functionality and optimize it with analytics," Blumstein said.

SAS will initially offer the Veridiem product as part of SAS' customer intelligence product line, Bober said, with some basic, back-end integration. The product will likely retain the Veridiem name and will have a similar subscription-based pricing model as other SAS products. The company is still developing the longer-term roadmap for tighter integration into its customer intelligence platform, he said.

Overall, Bober expects the new functionality to be very useful to SAS customers and expects the impact on Veridiem users to be minimal..

As a result of the expanded platform, SAS will target Veridiem's customer base in the automotive and consumer package goods industries, , and will also court companies in retail, pharmaceutical, restaurant and other mass markets, Bober said.

The acquisition also makes sense, given SAS's recent steps toward evolving into the packaged analytics market, according to Blumstein. This is SAS's seventh acquisition since 2000, a buying spree which included purchases of tools for campaign management, price optimization, real-time event driven marketing and retail planning and merchandise intelligence software.

The acquisition will give SAS the new functionality that it wants and Veridiem the new sales channels that it needs to effectively sell its software -- especially as MRM becomes the norm, Blumstein said.

"This is part of an evolutionary process. MRM started out as a new idea, but … in a few years, marketers and CMOs will expect to have an MRM solution in their organization," Blumstein said.

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