AdEspresso's CEO Max Chieruzzi
AdEspresso's CEO Massimo "Max" Chieruzzi

Vancouver, British Columbia-based Hootsuite today announced the acquisition of Facebook advertising partner AdEspresso, a company that offers a Software-as-a-Service- (SaaS) based Facebook and Instagram advertising suite. Simultaneously with that news, the social media management platform also revealed the launch of its latest tool, Hootsuite Ads.

Both endeavors are all about Hootsuite's mission to own the enterprise social spend market. Facebook, most obviously, is a key channel. "Social advertising has become a vital aspect of marketing; companies are looking for ways to reach an active, engaged audience while getting more mileage from content and advertising spend," Hootsuite CEO Ryan Holmes said. 

"With AdEspresso, we're bringing our users a simple, powerful, battle-tested solution that delivers measurable ROI."

Customized Services On Facebook’s APIs

AdEspresso by Hootsuite, as it will now be called, will continue as a self-service ads management product. 

As for Hootsuite Ads, it will offer enterprise-grade features and optimization services, according to the company.  AdEspresso's acquisition will also allow Hootsuite to build customized services on Facebook’s open APIs, says Blake Chandlee, VP of Marketing Partnerships at Facebook.

"Millions of organizations use Facebook advertising to drive the outcomes that matter most to them," Chandlee said. 

Dating site eHarmony, for example, appears to be a prime candidate for such future services. Its users are engaging daily with Facebook and Instagram, according to the site's director of Social Media, Kerianne Mellott.

"We look forward to working with Hootsuite to help us spend more efficiently and boost results," Mellott said.

The two companies celebrating the deal. Photo by AdExpresso

A Buildup of Tools, Products and Talent

Hootsuite has been expanding its reach in enterprise social spend category via a mix of acquisitions, organic product development and a carefully curated executive suite. Last year for example, it acquired Sales Prodigy, whose mobile app is aimed at relationship building for sales professionals on platforms like Twitter and Instagram. Sales Prodigy complemented an earlier product roll out by Hootsuite, called Hootsuite Amplify.

The company has also been recruiting marketing talent in a range of disciplines, including Bob Elliott, SVP of global sales for Hootsuite, tasked with expanding global sales of its enterprise platform, Sujeet Kini as the new chief financial officer and Penny Wilson as the company's first chief marketing officer.

Today, with the acquisition of AdEspresso, Hootsuite now sits at the nexus of more than $500 million in annualized social spend.

Hootsuite did not provide the acquisition price of AdEspresso.

An Italian Heart

The acquisition also highlights some little-noticed facts about AdExpresso, namely that while it is based in San Francisco, it “always had an Italian heart too”, the company wrote in its blog post announcing the deal. (The name should have been a tip off).

“The first investors were Italian, the product and design of AdEspresso were always ‘Made in Italy,’ the founders are Italian as well,” co-founder Armando Biondi wrote. “It’s a big win for the Italian ecosystem, hands down.”

It is a point worth noting: the ad ecosystem is surprisingly global, despite the fact that the major players, such as Facebook and Google, are US-based. While there have been a number of deals from China recently, Europe also has a rich array of start up and talent.

Organic Reach Only Goes So Far

Biondi also shed more light on why exactly HootSuite and AdExpresso choose to tie the knot. There was no obvious compelling reason or pressure: Hootsuite already had a partnership in place with AdEspresso and AdEspresso has been profitable for the past 20 months. 

In fact, as Biondi wrote, since it was launched three years ago AdEspresso has been growing 300 percent year-over-year. Today it employs 40 people, has 5,000 customers, 100,000 subscribers, 350,000 monthly uniques and $25 million in monthly ad spend processed.

The deal’s impetus, Biondi said, was that both companies were firmly convinced that the future for social advertising and social spend is in the convergence of organic and paid search — a trend that has clearly been underway but is still in its embryonic stage.

As social platforms become more mature and more content is created, organic reach naturally decreases. It becomes critical to have an effective integrated organic+paid strategy,” Biondi wrote.

And that, he concluded, was the core driver of the deal.