Dentsu, Merkle and the Billion-Dollar Marketing Capability
Dentsu Aegis has acquired the data-driven agency giant Merkle for about $1.5 billion. They agreed to terms yesterday on a deal that further proves the value, in real cash terms, of data-driven, targeted marketing.
Over the past few years, Merkle has staked a claim as one of the best partners for leveraging consumer data to drive marketing ROI through "customer relationship marketing" (Merkle's term, but a concept Target Marketing readers should understand well).
That reputation is built not just on its data and analytics capabilities, but also on special relationships with the major ad platforms, including Google and Facebook.
According to Suzanne Vranica of the Wall Street Journal:
"In recent years, [Merkle] has invested in ad and marketing technologies to help power its clients’ campaigns. Its systems are closely integrated with Facebook, for example, so Merkle could help target ads for a retailer using the data the retailer collects from its customers such as email addresses."
The deal — and the sheer value Dentsu applied to Merkle — highlights the importance of data, technology, relationships and the know-how to use them well in today's marketing. It's not about buying ads on channels. It's about reaching specific prospects and customers, directly, with increasingly personalized messaging through any channel they might be on.
And when you can do that, it's a billion-dollar capability.
Full Remarks From David Williams, Merkle Chairman and CEO on the Merkle Blog
Today, we announced that Merkle has accepted a majority investment from the Dentsu Aegis Network, replacing our previous investor, Technology Crossover Ventures (TCV). Part of Dentsu Inc., the Dentsu Aegis Network is made up of nine global network brands - Carat, Dentsu, Dentsu media, iProspect, Isobar, mcgarrybowen, MKTG, Posterscope, and Vizeum and supported by its specialist brands. Merkle will become the 10th member, and brings significant scale to the network as the second largest agency, following Carat.
As we considered a new investment partner, we sought a fit that would complement our vision, escalate our brand, and provide growth opportunities, while also valuing Merkle’s unique strengths and culture. Becoming a part of the Dentsu Aegis Network further strengthens our position and allows us to accelerate our goal of being a world-class performance marketing agency.
We selected Dentsu Aegis Network for its reputation and strong position as the leading global media group that specializes in media, digital, and creative communications services. Merkle fills the network’s need for a CRM agency specializing in global data and digital services, to round out its full breadth of agency capabilities.
Following the transaction, Merkle will continue to operate independently, and I will continue to serve as CEO, reporting into the Dentsu Aegis Network board of directors. I will also serve on the Dentsu Aegis Network’s Global Executive Committee. The Merkle Executive Committee, as well as the management team and staff remain in place, and we will continue to operate as Merkle, with no changes to how we work, how we go to market, or our brand.