As the Social Networking Footprint Expands, So Does Attention to Social Monitoring

The explosion of social networking sites has redefined how companies are approaching their online presence.  In many ways, social media has become an art of engagement for businesses that want to successfully maneuver within today’s changing consumer landscape. Brands are now, more than ever, directly connected to their customers via the social voice of the consumer. Tweets, likes, dislikes, comments, etc., play a very important role in brand marketing strategies. With this expanding social networking footprint, there is now an opportunity for brands to obtain direct and measurable real-time consumer feedback for brands to understand their positioning within the community.

However, it is extremely difficult to measure the impact of this new social voice on a company’s bottom line and marketing efforts. This uncertainty has created strong demand for analytics and reporting solutions that monitor awareness and provide insight into how consumers are interacting with these companies online. To remain competitive, companies need to understand consumer perception of their brand and implement new strategies based on actionable information on how they can better interact with their customers.

In 2011, social media and monitoring companies received a large amount of attention from investors, and this year, the sector is expected to benefit from a similar rate of financing, despite the overall market turmoil. Cascadia foresees that the niche social analytics providers in this space will be prime targets for funding and M&A as these technologies continue to proliferate in the market. In fact, over the past year, Google acquired several social media companies, two of which were social analytics companies. In June, the search giant acquired Post Rank, a company which uses a proprietary ranking algorithm to measure “social engagement” and in October, it acquired SocialGrapple, a social analytics graphing service, which is now used for Google+.

The ever-increasing popularity of social networks amongst consumers and businesses alike, combined with fierce competition to be the leader in brand recognition, make these recent acquisitions just the tip of the iceberg in terms of deal activity. Cascadia believes that ad networks, media companies, and agencies will move into the space as strategic acquirers in order to position themselves as players in the market.


Kushal Saha is a Managing Director in the Information Technology practice at Cascadia Capital with a focus on the Internet and New Media theme.  Saha originates, manages and executes all facets of M&A, recapitalizations, private equity and debt placement transactions.