French advertising giant Publicis is buying Epsilon to focus on first-party data but marketers say that integrating the two companies will be tough.
making it the company's largest acquisition to date. And the move is already sending ripples through the industry.
Under the pending deal, Publicis' agencies — which include Starcom, SapientRazorfish and BBH — will gain access to Epsilon's database of 250 million US consumers. Epsilon helps marketers collect and manage first-party data like CRM stats pulled from email and loyalty programs. The firm also layers third-party data like transactional and behavioral stats on top of first-party data to create audience segments, and the company's ad-tech arm Conversant takes the data to run ads.
As Facebook and Google continue to gobble up digital ad dollars, agencies are under increasing pressure to build out data practices that help marketers manage data.
Several sources said that while the Publicis acquisition makes sense, it's notoriously difficult for agencies to integrate acquisitions. In 2014, Publicis acquired Sapient for $3.7 billion and"Sapient is a brilliant acquisition that is today delivering very strong results, but it has taken time and has been a challenge to integrate," CEO Arthur Sadoun said during a call with investors on Monday.
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