Through Epsilon’s acquisition, Publicis will get a leg up in digital marketing and it will be able to help clients better personalize their advertising.
The deal with Alliance Data Systems Corporation will entail Publicis acquiring its Epsilon business for a net purchase price of $3.95 billion after a tax step-up, with a total cash consideration of $4.4 billion. Publicis will form a strategic partnership with Alliance Data’s remaining business.
This deal comes as the advertising industry witnesses a huge growth in digital advertising with the emergence of ad platforms like Facebook and Google. According to eMarketer, digital ad spending is expected to surpass traditional ad spending in the U.S. for the first time this year. eMarketer also expects digital to account for more than two-thirds of all media spending by 2023.
“Epsilon will fuel the entire Publicis Groupe organization, complementing its existing solutions and boosting its game changers,” the Paris-based company said in a statement to The Holmes Report.
“Companies like Epsilon or Acxiom would likely argue in an environment where privacy is increasingly important, their ability to ethically source and scrub data is valuable and important to marketers,” said Forrester analyst Jay Pattisall.“As privacy becomes more and more of a concern for marketers and their customers, that capacity to balance precision marketing with a customer and consumer privacy is a really important issue.”
Publicis also hopes the acquisition will also help it further personalize its connections with consumers.
“Our clients are facing increasing pressure from the rise in consumer expectations, the mainstreaming of direct-to-consumer brands and new data regulations,” Publicis Groupe CEO Arthur Sadoun said in a statement. “The only response is to deliver personalized experiences at scale. They have to transform to meet this new market imperative.”