On January 11, 2022, Vendasta, our organization, announced the acquisition of MatchCraft from Advance Local. MatchCraft is a leading global software company specializing in search, display, and social media advertising solutions for digital marketing agencies and resellers who serve small- and medium-sized businesses (SMBs) at scale. Brendan King, Co-founder and Vendasta CEO says the following:

“MatchCraft and Vendasta have been longtime friends, and we’re fortunate to have them join the Vendasta team… This partnership will bring MatchCraft’s enterprise-level technology to all our channel partners, allowing them to have a superior technology stack only large companies could previously afford. We know MatchCraft exceeds expectations because we hear it from many of their partners—who happen to be our partners, too.”

The deal marks an acceleration of both companies’ strategic growth plans, which aim to enhance and expand technology offerings for the benefit of partners and their SMB clients around the world. The addition of advertising technology to Vendasta’s portfolio of offerings allows channel partners to use one unified system to help their SMB clients build customer interest, awareness, connections, delight, and loyalty. In this episode, listen to George Leith, Brendan King, and MatchCraft CEO, Sandy Lohr discuss this new partnership and what it means for local economies.

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Introduction

George: Welcome to a special edition of the Conquer Local podcast. Recently on January 11th, there was a major announcement as Vendasta has acquired MatchCraft. Industry analyst Charles Lockland called it the combination of two of the most recognized brands focused on delivering digital marketing tech for small businesses. This deal couldn’t have happened at a better time. Advertising demand is growing exponentially, and small businesses are demanding more solutions from their local experts than ever before. Those experts are folks like you, the listeners of the Conquer Local podcast. Well, we have a real treat today in this special edition. It’s not often everyone is able to lock down two high-profile CEOs for a sit-down interview, especially when they’re on the heels of an acquisition. Today I have the privilege to chat with Vendasta CEO and co-founder Brendan King, and MatchCraft CEO, Sandy Lohr on this special edition of the Conquer Local podcast coming up next. Well, we drew straws as to who was going to go first, and Sandy, unfortunately or fortunately, you won or lost or whatever you wanna say. And we’re gonna start out with you. Being acquired is a big decision. And we’re wondering why now and why Vendasta?

MatchCraft’s History

Sandy: So just to clarify for listeners, MatchCraft was owned by Advance Local since 2014. That was an acquisition. And given the demand for marketing technology and advertising technology solutions in the marketplace right now, Advance decided that the timing is right to have us look for a strategic buyer. And it’s great that we can look at Vendasta as an excellent choice. We’re so glad that there’s a fit here, and there’s lots of reasons for that. And first off is something Brendan and I have both talked about, which is our core values align so closely. It’s almost as if they’re interchangeable, and we’re also both driven by a desire to support agencies and resellers through our model, which is not to talk or sell to the local business direct, but do that through resellers, and be able to expand our products and services to be more successful. So that’s been great.

George: Sandy, I’ll never forget that dinner when you and I first met in, I think we were going to some convention and we went out for dinner in San Francisco and we talked a lot about MatchCraft, and you had just joined as the CEO and you had a vision. Tell us about MatchCraft and the technology platform and the company and the people. Give us a little more around that.

Sandy: We were so young then, George. What the heck?

George: I was thinking about that, too.

Sandy: All right, so MatchCraft, we’re an advertising technology platform. We’re 23 years old. And it started out where we automate the craft of matching, MatchCraft, craft of matching buyers and sellers. And if you fast forward to where that started, to where we are today, our technology provides a scalable approach for paid search, paid display, paid social, and putting all those together for channel partners globally.

What Does This Deal Say About The MarTech Space?

George: So Brendan, it’s time to turn it over to you. What does this deal say about what’s going on in our space?

Brendan: Well, before I get going, I’ll let you know, I am not testing positive for COVID. I’m negative, but I’m losing my voice. Maybe it’s from all the talking I’ve been doing, but , there’s really a number of things that it says about the space. So we are really, what we’re knowing today is that advertising and marketing demand is growing, like we can see that everywhere. Local advertising spend is actually expected to go really rapidly in the next couple of years, and bringing MatchCraft into our partner base really gives us the tools we need to support those small businesses because MatchCraft gives us that best-in-class ad tech. And really, we’ve been helping small businesses. Our goal is to be the single source of truth for a local business, give ’em everything they need to run their business, that only login they need, but we’ve had mostly MarTech, and we’ve moved into some productivity, and we’ve got things like e-commerce and point of sale coming, but we really didn’t have that ad tech. And so, MatchCraft gives us that best-in-class ad tech. But everything that we do is in service to our partners, our channel partners, the folks that are helping those small businesses. It’s all about helping those small businesses. So that’s really what it’s all about. How might we help those small businesses succeed?

George: I was working with one of our existing channel partners just this last month. And as we started to work with that organization, we realized that they didn’t have a solution for their ad tech. They just had individuals going in and setting up ad campaigns and MatchCraft is a perfect way for them to help scale that work, and the look of delight on the team that was doing the work’s eyes when we started to talk about what might be possible and introduce some of the MatchCraft team, it’s really cool to see that magic come together. Sandy, what does this deal mean for your teams and for the operations of MatchCraft?

Brendan: Well, I know it sounds cliche, but business as usual is really what we want our teams to understand in terms of our people and our operations and our clients. And Vendasta, we’re very fortunate. They’ve welcomed the entire MatchCraft team. So we’re all now part of that. So we’re moving over as an entire entity and will remain an independent operation. So basically, our clients can expect to continue to receive the same technology, the same service, the same performance that they’ve grown to trust. And we’re just looking forward to seeing what more we can provide based on the resources that Vendasta brings to the table.

Integration Plans Between MatchCraft And Vendasta

George: Well, I appreciate the fact we were able to get this scheduled because all of us have been in numerous meetings as we talk about integrating. Brendan, can you expand on those integration plans a little bit more for our audience?

Brendan: Well, it’s really a natural fit, and we’re not gonna try to do anything unnatural to our customers. So Vendasta’s platform, the reason channel partners come to Vendasta is for two reasons, products and services to sell and a platform to scale, and then the ability to deliver that to the small business with that single login. And so, what MatchCraft’s done is give us the ability to actually provide that advertising platform. So for those customers, those channel partners that are selling advertising to small business, it’s just a natural fit. We’re not gonna rush anything. We’ve already got the ability for any of our partners to use the MatchCraft platform without any heavy duty integration, but to get into some of the nuts and bolts, we’re gonna make it easier. MatchCraft’s got some great sales tools. So we’re gonna make it easier for our partners to give them quotes and estimates for how advertising can help them. That’s gonna solve, all Vendasta partners will get that. We’re gonna make our reporting on advertising better. MatchCraft’s got a fantastic set of data to report to those small businesses. We’re gonna bring that into the Vendasta platform. And those customers that are at scale, as you pointed out George, and need to manage 100 campaigns, we’re gonna let ’em grow their business without having to hire a whole bunch more people, and do a better job with the ad tech that optimizes those campaigns and tells ’em where they gotta put with their focus. Now, on the MatchCraft side, Sandy’s team is gonna look to their enterprise customer base and say, hey, do any of these customers need tools to market, sell, build, fulfill, and deliver that critical infrastructure to SMB clients? A lot of those enterprise customers could benefit by selling more products and more integrated products. And I think that’s where we’re gonna go. We’re not gonna do anything unnatural. We’re not gonna interrupt any of our development plans on both sides. We’re really excited about working together.

George: Sandy, we got two CEOs on the call, and part of the CEO’s job is to look into the future and to kinda read the crystal ball. Now, Brendan already read his crystal ball to us here a couple of weeks back when we did our annual year in review, which we’ve done for five seasons now. So now I’m gonna put you on the spot and ask, as you explored this acquisition, how did it line up against your crystal ball and the future state that you were envisioning for MatchCraft’s technology?

Sandy: Yeah, well, I think from my perspective and Brendan wrote the check. So I have to say that I think that’s a vote of confidence that we were aligned in terms of where we envisioned the business going and the alignment to Vendasta. So we had two primary areas of growth. One of ’em was in the cross-channel. We’re known for the search, social, and display. How do we make that more flexible and easy in terms of running across those multiple traffic sources for small businesses, and to do that at scale? And so, we’ve done some really innovative things in that area, and to continue on that growth and keep adding channels to that and keep growing that expertise is one long-term goal. And being able to tie in the Vendasta resources with that is gonna just speed that up. The second, which really is a nice fit. And gosh, this goes back a couple years ago, but Neil Polachek kinda woke us up and he said, look, he’s the first one that I heard quote this stat. And it was that by 2025, 75% of all local business decision makers and business owners globally will be millennials, and millennials are digital natives. And so, we’ve always had this discussion internally in the industry about do it for me, do it with me, do it yourself. And because of those digital natives running their businesses, there are many, many cases today that people are ready for do-it-yourself solutions, SaaS movement. So being able to steer us longer term and develop into those areas of DIY and SaaS solutions, that’s very much part of where we were going anyway. And then you add Vendasta’a marketplace to that for channel partners, ad agencies of all sizes to select from hundreds of SKUs. I look at it and every time I’m getting to know it more, to me, it looks like an Amazon storefront for local businesses for marketing services, and being able to add the ad tech solutions to that for all the paid digital solutions we bring just expands that. So we’ll be able to touch a larger set of customers with the flexibility, and adding the Vendasta resources just speeds up our timeline. So it takes us where we were going faster and likely better because of the expertise that we get to take advantage of.

George: As both organizations have been running side by side dealing with a lot of the same channel partners who deal with a lot of the same end users, we hear this thing of, ah, I got a guy, or I got a gal that looks after various components. And I think that’s what you were saying there, Sandy, is we’re moving more towards people will wanna do this themselves. And that ability of DIY, it’s been a bit of a dream over the past 10 years but more and more we’re finding people saying, no, I’ll log in to that thing and I’ll do that. Is that what you’re referring to is a true DIY local hardware store owner when it comes to their ad tech?

Sandy: Well, I don’t know about the local hardware store owner. I know that they’re gonna be more privy to the fact that they don’t have to see somebody face to face. They are going to be willing to go in, but certainly, even the ad agencies, the channel partners that wanna do that for hundreds and thousands of campaigns are willing to do that without having somebody hold their hand, without having a managed solution provider and can go in and do it on behalf of those local businesses. But certainly, the local business, too, is more apt to go in and see the results. They wanna look into the analytics and the reporting aspects of those campaigns and see what there is. They wanna ask more questions about what more they can be doing and the results that they’re getting, and having that exposure to agencies that now have this huge tech stack behind them is just gonna be a win-win.

George: Brendan, earlier, you talked about the fact that MatchCraft is in the Vendasta platform today. Can you expand on that a little bit because we’ve got different channel partners. We’ve got large enterprise channel partners, we’ve got smaller ones. What were you referring to?

Brendan: Yeah, so I was referring to kinda like what Sandy was just talking about there. Like, I would like, the advertising is still fairly complicated. It’s more akin to buying a house than buying a plane ticket. Someone will buy a plane ticket DIY, but you probably still want a realtor when you buy a house because of all the complexity, and I think advertising’s like that. And what Sandy’s referring to is these channel partners need someone to help them do that. More and more, they’re gonna be DIY where they’re gonna wanna use the SaaS platform. That’s where we’re going with the integration. But today, what I said when I said MatchCraft’s in the platform, we at Vendasta use the MatchCraft platform to deliver that for a lot of our smaller agencies who say, man, I don’t have a tool set or I can’t scale. I have to hire a different ad guy. I don’t wanna hire all those people, but I wanna sell campaigns. So Vendasta has been using the MatchCraft platform for some time, factored into our, we love it. And so, that’s what I’m referring to.

George: Sandy, when we talk about market opportunity, why do you feel that there’s such a high demand for ads in the local space, especially recently as we are in this new post-COVID world?

Sandy: Yeah, well, the pandemic has certainly, in some ways, made local businesses the safer option. It’s the socially responsible alternative to big business. And there is a global distrust in big business, and there’s a global wave to consumers supporting local businesses. The shop local mantra has really caught on fire, and it’s here to stay. There’s local businesses that have adopted digital shoppers, and they’ve engaged those consumers. And they’ve had to, right? They had to shop online, pick up in store or have delivered, and even just really put on steroids the e-commerce aspect of local businesses, and rightfully so because consumers, 90% of them are gonna start with a search, are going to absolutely visit a store within one day of finding them online. So there’s tremendous amount of synergy between digital and in-store, and digital and consumers overall, and the social trends that are happening with the amount of people that are being influenced by social advertising, in addition to reputation and referrals is really enhancing the need for what we’re doing on the paid side.

Comparing MatchCraft and CalendarHero Acquisitions

George: Yeah, we really saw that accelerate. A lot of those e-commerce storefronts were built billboard in the middle of nowhere. So you need to run some ads to drive some attention to those storefronts, and lots of great stories around where businesses have transformed by adopting e-commerce and having a great online advertising component. Brendan, not the first acquisition in the last year. CalendarHero was acquired just a few months ago. We’ve alluded to some of this on this show. Can you lay out how this deal was different?

Brendan: Well, first, I’ll lay out how they’re the same. So both of these acquisitions accelerate our strategy. And our strategy is to become the largest ecosystem of supply, demand, and distribution of that software technology and services that small businesses need to run their operations. And so, when we look at this, what does that mean? It means more transactions through our ecosystem, and a higher value of those transactions. That’s the North Star metric. And then, if you look at each of the constituents, the supply, how many vendors of those products and services do we have? And then the demand is how many small businesses need those products and services that are in our ecosystem? And then lastly and maybe most importantly, the distribution, those channel partners that deliver that supply of products and services to those small businesses on the demand side. Both of these things give us some of that. CalendarHero is a point solution before we purchased it where that’s how we started. We started with listings, reputation management, social media management, then added websites and other things that Vendasta builds. And now we’ve got a calendaring product. It’s a critical part of all small business operations. And so, it gave us a lot more small businesses. So that increased one of our flywheels. On the other side, MatchCraft has given us not only a ton of small businesses, but they’ve given us a huge amount of enterprise channel partners that are delivering value to those small businesses. So really, with the MatchCraft thing, both of our teams are gaining. Like Vendasta’s getting a talented team of industry experts in the ad tech space, enterprise sales and software knowledge, and this fantastic ad tech platform. And it’s just great. And so, what MatchCraft’s getting is this, from Vendasta, this huge, large leads funnel, a larger sales force, and the increased marketing and development resources that we’ve got to fulfill that strategy. So those are the differences between the two.

George: Well, I think one of the taglines was, it was a match made in heaven. And you guys have alluded to that over the last few minutes. Brendan, will there be more deals like this in the future?

Brendan: Well, hold on.

George: Well, I know you well enough to know that’s all I’m gonna get on that one. Sandy, again, we’ve known each other a long time. I’ve always admired the way that you’ve led and built a culture around that company. What are you most excited about when it comes to this deal?

Brendan: Well, you said culture, and that is extremely important to the MatchCraft team, and this is a culture fit, and it protects, it supports, it enhances what MatchCraft has done and our team and our clients. So that’s number one. And I think the second is just the obvious, which is accelerated our development timeline. And third would be the opportunity to learn from the Vendasta team. They’ve got an expert group of people and it’s been fun just in the last week here to get to know so many of them. And we’re really looking forward to getting better based on their expertise as well.

Conclusion

George: Well, thank you both for joining us. You’re both Conquer Local alumni and have been on the show over the years and it’s great to have us together. I was thinking back, Sandy, to that first episode that you and I did. And I don’t think that any of us imagined that this might be able to happen. So we’re super excited about it, I’m sure, and thanks both of you for taking some time out to discuss this with our conquerors worldwide.

Brendan: This is certainly an opportunity where two plus two is a lot more than four. Thank you.

Sandy: Sounds good. Thanks, George. Bye, Brendan.

Brendan: Bye bye.

George: Extending the Vendasta platform allows our partners to solve more of their small and medium-size business client problems. MatchCraft providing that best-in-class ad tech software, they service an addressable market of over $150 billion. The Vendasta platform services the MarTech productivity and e-commerce stacks that have over a $220 billion total addressable market. Advertising and marketing demand is growing. All of you listening know that. The local advertising spend is expected to grow rapidly in the next couple of years, and bringing MatchCraft into the Vendasta partner base equips them with the tools their local business customers need to thrive as businesses reopen in this new normal. Also, future acquisitions will accelerate the Vendasta strategy. You heard Brendan talk about the goal of becoming the largest ecosystem of supply, demand, and distribution of software, technology, and services for small and medium businesses all over the planet. Vendasta will continue to evaluate strategic acquisition opportunities to improve and extend the platform to support our channel partners and the SMBs that they serve all over the world. Thanks to Brendan Kind, CEO of Vendasta, and Sandy Lohr, CEO of MatchCraft for joining us today on a special edition of the Conquer Local podcast. My name is George Leith. I’ll see you when I see you.