Now an integral unit within Publicis Groupe, Epsilon is one of the world's biggest specialists in data marketing and analytics, or what it now describes as "outcome-based marketing". Although comparatively little-known in the wider marketing industry compared to the likes of Wunderman or Rapp, it had become the single biggest marketing agency by far in the US by revenues by 2014, getting bigger all the time as a result of acquisition and expansion. In 2011, the group acquired marketing services provider Aspen, which continued to operate as a separately branded subsidiary for the rest of that decade. That was followed a year later by roll-up Hyper Marketing and then in 2014 by digital targeting specialist Conversant, formerly ValueClick. Primarily Epsilon helps clients manage and maximise the value of customer contacts through data analysis or email-based customer acquisition and loyalty marketing programmes. Services include list analysis and rental; development of automated database management software; creative production of direct marketing material; and more recently in in-store retail media ad marketing. It was among the most highly rated leaders in Forrester's 2021 surveys of customer database & engagement agencies, and loyalty solutions, and a strong performer in sell-side retail media solutions. The business was put up for sale in early 2019 by owner Alliance Data Systems. A deal was agreed with Publicis Groupe for a final price of $4.4bn; it was the French group's biggest ever acquisition, completing in July 2019. Epsilon now works in close partnership with all four of the Groupe's main operating divisions. The big challenge is for the Groupe to demonstrate the justification for not just the purchase but also its huge price tag. For 2018, former owner Alliance Data reported final year revenues for Epsilon of almost $2.2bn and EBITDA of $475m. Long-time Epsilon executive Bryan Kennedy remained CEO of Epsilon through its acquisition by Publicis before announcing plans to retire at the end of 2021. He was replaced as executive chairman by John Giuliani; Ric Elert is president & COO.
Capsule checked 8th March 2022
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Marketer Moves 18th Aug 2021: New leadership at Epsilon. See Marketer Moves (members only).
Adbrands Daily Update 15th Jul 2021: Publicis was back on the acquisition trail with a deal for retail ecommerce and adserver platform CitrusAd. Terms were not disclosed. Originally launched in Australia, CitrusAd now conducts 50% of its operation in the US, and claims to serve more than 70 leading retailers as well as 4,000 brands. It aims to help brands optimise their ad placements within retailers' ecommerce sites. The business will operate as a unit of Publicis-owned data marketing division Epsilon.
Adbrands Daily Update 1st May 2020: In a bid to keep the wheels turning during lockdown, Publicis Groupe launched a new offer to midsized US marketers under the banner of "The Pact". Its newly acquired Epsilon division will guarantee to deliver an agreed set of key targets, for example, sales, customer acquisitions or return on digital ad spend. If results are not delivered, it will refund the entire agency fee and media expenditure. Clients with revenues between $10m and $1bn are eligible for the offer. A brilliant innovation or a desperate ploy to attract clients? We'll let you decide. Epsilon was the Groupe's most expensive-ever acquisition, with a price tag of $4.4bn.
Adbrands Daily Update 16th Aug 2019: Starcom retained the global Novartis Pharmaceuticals account with the creation of a new dedicated unit, NovartisONE2. Starcom already handled the business, though some assignments were managed by Wavemaker and specialist media agency CMI. These will transfer to the new agency, which combines teams from Starcom and newly acquired Epsilon. "Just as Novartis seeks to reimagine medicine, we too seek to reimagine and transform how we deliver data-driven marketing strategies for our clients," said Starcom CEO John Sheehy. "Rooted in a data-led, digital-first approach, NovartisONE2 unites Starcom and Epsilon to deliver capability that is agile, collaborative and relentlessly focused on driving business outcomes, along with delivering personalized experiences at scale for Novartis' complex and evolving consumers." The account has global billings of around $600m, the bulk of that sum in North America.
Adbrands Daily Update 15th Apr 2019: Publicis Groupe announced its biggest ever acquisition: US-based data and CRM giant Epsilon. The French group has agreed to pay a whopping $3.95bn for the business, almost twice Epsilon's annual revenues last year, and almost half Publicis's own income. It's not just the biggest-ever acquisition by Publicis but also the second biggest in the advertising industry (after Dentsu-Aegis). Epsilon controls a huge database of demographic and contact information, behavioural, transactional, online and offline data. This is an exceptionally bold move by Publicis and further cements that group's shift away from traditional creativity towards data-driven marketing. The group also agreed a strategic alliance with Epsilon's vendor Alliance Data, which continues to operate credit card processing and loyalty card services for third-party clients. Publicis CEO Arthur Sadoun called it "a one-time opportunity" to make the group a "leader in this data-led, digital-first world". Epsilon will operate as a separate group-wide entity, parallel with Publicis.Sapient. It will continue to be led by current CEO Bryan Kennedy. The deal coincided with another set of weak financials for 1Q. Publicis reported an organic decline of 1.8% to reported revenues of €2.1bn. The Americas fared worst, with North America down by a shock 4.6% and Latin America by 6.3%. That offset decent though hardly exceptional growth in Europe (0.8%) and Asia (1.2%). Individual markets that did well included India (9.3%), the UK (5.1%) and France (4.2%), but Germany plunged by over 10%. The big challenge facing Publicis in the year ahead will be to process its huge new acquisition without distracting management and existing agencies from turning around new business performance.
Adbrands Daily Update 1st Apr 2019: One of the biggest agency deals for several years could be announced this month. Data giant Alliance Data Systems has put its mammoth Epsilon data and CRM business up for sale after a disappointing year. Like other data firms - not least the smaller Acxiom, acquired last year by Interpublic - Epsilon has been impacted by the introduction of new data privacy regulations. Yet it is still one of the top five marketing services businesses in the US, with revenues last year of almost $2.2bn. It has been formed from the acquisition and merger of a string of agencies over the years including Aspen Marketing, Hyper Marketing and the adserving and technology specialist Conversant (perhaps better known by its previous name of ValueClick). Publicis Groupe has registered its interest, but the price tag of around $5bn is likely to be more than the French group could (or should) pay in these more challenging times. It would be the Groupe's biggest ever acquisition. Another possibility could be a joint bid by private equity firm Advent International and Goldman Sachs. If a deal is agreed, Alliance Data will focus instead on its two other divisions which provide credit card management and billing services and loyalty programs.
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