Constant Contact CEO Touts ‘Distribution Benefits’ After $1.1 Billion Acquisition by Endurance
Big changes are afoot in the email marketing space. Endurance International Group Holdings, operator of end-to-end small business services spanning domain registration, web hosting, blogging, webpage design, cloud hosting, and ecommerce, has added email marketing specialist Constant Contact to its stable of brands. The chief benefits will be broader distribution for Constant Contact’s products and services, better integration with other companies, and more resources for marketing and sales.
The transaction, valued at approximately $1.1 billion, is expected to close during the first quarter of 2016, subject to Constant Contact shareholder approval. Together, Endurance and Constant Contact will serve more than five million small businesses and nonprofit organizations and boast combined revenue greater than $1 billion. Veteran analyst Peter Krasilovsky describes the deal as “an SMB version of Salesforce’s $2.5 billion acquisition of ExactTarget in 2012.”
Constant Contact brings a recognized, visible brand to Endurance’s suite of lesser-known companies. It also adds an essential marketing capability highly prized by small businesses. According to Street Fight’s Local Merchant 2015 report, 51 percent of respondents said they use email marketing, a tactic that ranked second only to online advertising. In a survey of around 100 small business owners that we conducted last month in conjunction with Alignable, 35 percent selected email as their most effective marketing tactic, trailing social media and SEO, so there’s clearly room for improvement, even with such established tools.
To find out what’s in store for Constant Contact after it joins the Endurance family, I spoke with CEO Gail Goodman about the acquisition:
What do you anticipate will be the major changes to your product roadmap and the markets you serve?
It will enable us as a combined entity to bring together a complete suite of solutions that start when a business begins to get online, when it’s looking for web presence — domains and hosting — through marketing to ecommerce, from inception to growth. The Constant Contact product suite will be sold side-by-side with the Endurance product suite, but over time, become increasingly integrated so we can make that experience seamless for small businesses, so they can start and grow with us.
Constant Contact enjoys strong recognition among small businesses; do you expect to maintain it as an independent brand entity?
Endurance is not a name a lot of people know, mostly because it operates a “house of brands,” so we very much expect to continue to operate the Constant Contact brand. But we will also bring our products to market through the Endurance brands that target different slices of the small business market. We plan to continue building the Constant Contact brand, which will be the largest in the Endurance family.
You have your SMB API [which enables on-demand companies to connect to Constant Contact customers via a single platform] in beta — does the acquisition affect the timing of the rollout or the audience you’ll be targeting for this?
At this point, we’re expecting business as usual. All things are moving ahead. It will be months before the acquisition closes and we have detailed plans on what we’re doing post-integration, but the SMB API is an exciting innovation that we expect will continue to come to market. Part of what Endurance is interested in is our innovation engine, and that one’s at the top of the list.
Will the acquisition help Constant Contact expand overseas?
Endurance has a nice international presence and a localization team that can help us get Constant Contact internationalized. We’re going to start with the low-hanging fruit of bringing our products to their U.S. brands, but over time, we do expect Endurance to help us get international faster.
We think we’ll get really great distribution benefits. It’s taking our mission further by getting broader distribution. That’s the number-one rationale for the acquisition.
Noah Elkin is Street Fight’s managing editor.