Dive Brief:

• Tinuiti, a performance marketing agency, acquired Amazon specialist shop Ortega Group, according to a news release. Financial terms of the transaction were not disclosed.
• Founded in 2013, Ortega is staffed with former Amazon employees — the two companies share a hometown of Seattle — and works with clients including Gerber, Grande Cosmetics, Nulo Pet Food and Pantone. Together, Tinuiti and Ortega claim to offer "the industry's most robust full-service Amazon and marketplace program," per the release.
• Tinuti is building out its Amazon expertise as e-commerce adoption accelerates under the coronavirus pandemic. Merger and acquisition activity continues to pick up as marketers try to gird their businesses for a future where more transactions happen online.

Dive Insight:

Tinuiti's purchase of Ortega is another signal that e-commerce specialist shops could be ripe acquisition targets as performance marketing and traditional advertising agencies alike seize on a pandemic-driven online shopping boom. M&A activity cooled in the early days of the health crisis, when the economic impact of COVID-19 was less certain. But dealmaking could be picking back up as a recovery starts to take shape.

"If we learned anything from the acceleration of eCommerce that started with the pandemic, it's that clients need strategic and operational support in addition to advertising services to ensure sustained and profitable growth," Tinuiti CEO Zach Morrison said in a press statement. "Commerce brands of the future require a new model that goes deeper than just media and that's what this acquisition achieves."

Amazon remains the dominant player in online retail and an increasingly formidable one in digital advertising. In recent years, it has considerably expanded the suite of products brands can use to reach Prime customers. Amazon's advertising revenue jumped 64% year-on-year to $7.95 billion in the fourth quarter, a growth rate surpassing that of other business segments>. But marketers have found some Amazon features lacking, including campaign management and reporting tools, creating an opportunity for third-party partners to fill the gaps.

Tinuiti claims to already be one of Amazon's largest partners, managing more than $400 million in media on the platform, the release stated. With a staff made up of many former Amazon employees — managing partners and co-founders Adam Ortega and Phil Stolt previously worked at the e-commerce giant — Ortega can deepen Tinuiti's capabilities in areas like content optimization, reporting and product launches.

The acquisition is one of the first major moves Tinuiti has made since receiving an investment from New Mountain Capital late last year. The partnership will help Tinuiti "accelerate its competitive advantage across the entire digital marketing and media landscape," per a prior announcement. Tinuiti is currently holding talks to acquire two other companies, CEO Morrison told The Wall Street Journal.