John McGee: 'Publicis data deal ushers in the next frontier in marketing'
Over the past few weeks, thousands of Irish SMEs around the country will have received a letter from Google offering them an €80 credit when they spend €40 advertising their wares on Google' AdWords platform, the money-making machine that helped the company hoover in a staggering $136.8bn in 2018.
What most Irish SMEs won't realise, however, is the piece of direct mail - yes, direct mail is alive and thriving - originated in the Dublin offices of Epsilon, the data and technology agency which is in the process of being sold to the French giant Publicis for a whopping $4.4bn.
The deal, which was announced last Sunday, will see Publicis acquire Epsilon from Alliance Data Services, the Texas-headquartered provider of loyalty, subscription and marketing services.
With over 8,000 staff operating in 87 locations around the world, Epsilon's Irish business works very closely with Google's EMEA offices in Dublin and has teams embedded within the group in areas like global media and strategy, platforms for things like crisis management, content marketing and strategy while working closely alongside product groups like AdSense, the platform that allows content producers sell ads on their sites.
Other past and present clients of Epsilon in Ireland include the likes of Dell for which it carries out a range of marketing activities from direct mail to customer events - PrePay Power and INM, publisher of this newspaper.
While the sale has some way to go before it closes, it will go down in the record books as one of the marketing industry's biggest M&A deals. Only two other transactions - Dentsu's $4.9bn acquisition of Aegis Group in 2013 and WPP's $4.7bn purchase of Young & Rubicam in 2000 - were worth more.
With annual revenues in excess of $2.2bn a year, Epsilon's first foray into the Irish market came in 2006 when Hyper Marketing, a subsidiary of the business, acquired Frank McCaughey's Acorn Marketing for a reputed €6m. Since then it has grown the business, rebranded under the Epsilon name and earned a strong and justified reputation in both the data and creative space.
Data and its various applications, as we know, is playing an increasingly important role in the marketing industry, not just for advertisers and their marketing departments but for creative and media agencies too. As the big agency holding groups continue to tweak their business models, seek out more value-added and profitable revenue streams, strengthen their overall margins and face up to the challenges posed by the arrival of consultancy groups like Accenture and Deloitte on the scene, data - in particular first party data - offers a way forward.
And Epsilon has bucket-loads of the stuff, a lot of which is proprietary data.
First-party data is one of the holy grails in marketing and advertising. It's the reason why companies like Google and Facebook have grown to the size they are now. It's the reason why companies like Tesco and Boots have developed loyalty programmes that are constantly singled out as best-in-class. But it's also one of the missing pieces that many brands and indeed agencies fall down on as they seek to create a more personalised 360-degree interaction with consumers.
If agencies like Publicis can supply their clients with a range of first party data - as opposed to less effective and regulatory-restrictive third party data - it will strengthen their existing creative, digital and media offerings while at the same time help to cement their relationship with clients. Or, as Arthur Sadoun, the CEO and chairman of Publicis said last week: "this acquisition will accelerate the implementation of Publicis's strategy to become the preferred transformation partner for its clients."
It is still too early to say what this deal might mean for Epsilon in Dublin or for Publicis's interests. These include minority shareholdings in the creative agency Publicis Dublin as well as Ireland's largest marketing communications group Core which in turn owns a number of agencies like The Spark Foundry, Starcom and Zenith, all of which are leading Publicis brands.
Publicis, of course, is not the first agency network to dip its toe in the data market. Last year, for example, one of its main rivals, IPG, splashed out $2.3bn to acquire Acxiom while the former boss of WPP, Sir Martin Sorrell, has indicated that his new venture S4 Capital is also on the lookout for a data-focused acquisition. Other agency networks and indeed perhaps some of the consultancy groups may also enter the fray.
In the meantime, it looks like we're hurtling towards the 'golden age of data'. This will bring many challenges and opportunities for those involved particularly when it comes to responsibly and effectively applying it for the benefit of not just clients and advertisers but consumers too.
FOUR PROUD PROVINCES
With Irish eyes fixed firmly on rugby this weekend, Bank of Ireland has launched a new campaign to support its sponsorship of all four provincial teams.
The campaign, which was created by TBWADublin, marks the next iteration of the bank's recently launched 'Begin' proposition and features some of the backroom staff at all four provinces as well as cameo appearances from Robbie Henshaw, Conor Murray, Quinn Roux and Jacob Stockdale.
SUITING ACTIONS TO WORDS
For an industry that constantly preaches about the importance of marketing, the advertising industry can be a bit slow to practice what it preaches. Of the 60 or so agencies operating in Ireland, only two have marketing directors. Rothco, now part of Accenture Interactive has the very capable Jill Byrne as its director of marketing. Now Core, the largest fish in the pond, has appointed the equally capable Finian Murphy as its marketing director.
Sunday Indo Business