Ad tech executives reacted to Monday’s news that Japanese holding company Dentsu Aegis Network acquired a majority stake in Merkle, a CRM and performance marketing agency. Columbia, Md.-based Merkle is one of the largest independent digital agencies. While the terms of the deal weren’t disclosed, Merkle has more than 2,900 employees and reported $436 million in revenues in 2015 -- a 14% increase over 2014.
Merkle is likely to give Dentsu Aegis a shot in the arm where data is concerned, in addition to addressable and real-time advertising and marketing functions. The deal also increases Dentsu Aegis’s U.S. presence, where Merkle has 16 offices. Merkle has 650 clients globally.
Here’s what some executives have to say about the deal:
“This deal demonstrates the market is placing greater value on customer lifecycle messaging and marketing to segments of customers based on their relationship to the brand. Marketers are increasingly able to track this data and so are looking for tech and services to make it possible to drive real lift through targeted messaging. It's no longer about just general demographics and treating everyone as a prospect or ready to buy,” said Victor Wong, CEO, Thunder.
“The industry can’t keep up with the pace of change. We’ve seen this for a long time now -- and that’s why, for the last five years, we’ve made our own strategic acquisitions. …You’re seeing a lot of agencies playing ‘catch up’ because they’re lacking the data and technology capabilities needed to support client’s business. Merkle’s offering adds a deep level of data to Dentsu’s capabilities, and that’s a powerful asset to have,” said Andy Frawley, CEO, Epsilon.
Why it’s a smart deal: “Engaging consumers is becoming more complex, and to do this effectively you need to bring together capabilities in technology, data, and creative to reach them at various touch points. We’re seeing the most successful campaigns happen when you can effectively activate across all three disciplines. Merkle will support Dentsu’s offering by bringing unique capabilities to the table,” Frawley said.
"In today's marketplace, agencies need to expand their technical capabilities and targeting abilities to remain relevant. As more brands bring advertising in-house with the help of self-serve DSPs [demand-side platforms] and first-party data from walled gardens, agencies need to adapt and give their clients a reason to stay,” said Patrick Hopf, President and Co-Founder, SourceKnowledge.
Hopf added: “It's not a surprise to see a major agency like Dentsu invest so heavily in people-based-marketing technology. This is a clear signal of where the ad industry is moving as marketers demand solutions that properly leverage data to create addressable, measurable, and personalized advertising on the open Web.”
“For Dentsu, the advantages are twofold: To the extent that overall revenue/billings is important, it provides scale and expansion (particularly in the U.S.) and secondly, it gives Dentsu more leadership in data-driven marketing,” said Eric Franchi, co-founder of Undertone. “It makes sense when you step back and think about how one of the major trends for the future is ‘people-based marketing.' Merkle’s focus on enabling first-party data gives Dentsu a platform to build on in that respect."