Publicis to buy Epsilon for $4.4 billion

French ad holding company Publicis said Sunday the item would likely pay about $4.4 billion for marketing services company Epsilon to give the item a leg up in digital marketing along with 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 cost of $3.95 billion after a tax step-up, which has a total cash consideration of $4.4 billion. Publicis will form a strategic partnership with Alliance Data’s remaining business.

The deal comes as the advertising industry reckons with the huge growth of digital advertising along with the emergence of players like Facebook along with Google. Digital ad spending was anticipated to surpass traditional ad spending inside U.S. for the 1st time This particular year, according to eMarketer, which also expects digital to account for more than two-thirds of all media spending by 2023.

The acquisition gives Publicis access to Epsilon’s data capabilities. The company says, for example, the item has more than 250 million unique consumers identified inside U.S. The company says the item can build on top of a client’s first-party data with its own assets, like behavioral along with transactional data.

Major ad holding companies have grappled with whether to own data or to insource the data via providers. Last summer, Interpublic Group of Cos. agreed to acquire Acxiom’s Marketing Solutions for $2.3 billion. Dentsu Aegis Network in 2016 bought a majority stake in data marketing company Merkle.

Companies like Epsilon or Acxiom would likely likely argue in an environment where privacy is actually increasingly important, their ability to ethically source along with scrub data is actually valuable along with important to marketers, said Forrester analyst Jay Pattisall after Publicis said last week the item was in talks to buy Epsilon.

“As privacy becomes more along with more of a concern for marketers along with their customers, of which capacity to balance precision marketing with customer along with consumer privacy is actually a definitely important issue,” he said.

Publicis also hopes the acquisition will also help the item further personalize its connections with consumers.

“Our clients are facing increasing pressure via the rise in consumer expectations, the mainstreaming of direct-to-consumer brands along with brand new data regulations,” Publicis Groupe CEO Arthur Sadoun said in a statement. “The only response is actually to deliver personalized experiences at scale. They have to transform to meet This particular brand new market imperative.”