IPG acquires Acxiom's data-marketing business

UPDATE: July 3, 2018: Interpublic Group confirmed in a news release on Monday, July 2, that it plans to acquire Acxiom Corporation's data marketing business, Acxiom Marketing Solutions, in a deal valued at $2.3 billion. The deal does not include Acxiom's LiveRamp business arm. The Acxiom brand name will, however, become part of IPG's portfolio, and Acxiom's 2,100 data and analytics professionals will join the ad holding group. "In a world where everything is becoming data-driven, Acxiom Marketing Solutions offers the deepest set of capabilities for helping companies navigate the complexity of creating personalized brand experiences across every consumer touchpoint," Michael Roth, the chairman and CEO of IPG, said in a statement around the news. "Combining AMS with a range of IPG assets will help us shape the future of our industry."

Dive Brief:

Interpublic Group and Dentsu, two of the largest ad holding companies, are expected to submit bids to acquire the data-marketing division of Acxiom, unnamed sources familiar with the matter told The Wall Street Journal.
Potential buyers submitted expressions of interest in April. Acxiom's data-marketing division made up about three-quarters of the company's total revenue for fiscal 2018. The unit specializes data housing and managing for businesses, including retailers and financial firms.
In February, Acxiom announced a review of the division, which had revenue of $697 million in the fiscal year that ended March 31. Acxiom could net between $1.5 billion to $1.8 billion with the sale, sources told the Journal.

Dive Insight:

Traditional ad agencies like IPG and Dentsu have felt pressure to ramp up a focus on data and technology as marketers demand better personalization, campaign measurement and effective tracking of ROI. The acquisition of Acxiom's data-marketing division could give the winning bidder a clear advantage in these areas and allow them to better compete with specialty shops and management consultancies like Accenture and Deloitte, which have in recent years started to encroach more on agency turf.

Brand marketers have expressed frustration with what they see as agency partners' slow adoption of marketing technology. A recent survey by the World Federal of Advertisers and The Observatory International found that 84% of multinational brands think agencies are struggling with marketing technology. Such frustrations are viewed to have led high-spending companies, such as Unilever and Procter & Gamble, to reduce their agency rosters and bring more marketing functions in-house.

The sometimes contentious relationship between data and creative was also a widely discussed topic at the Cannes Lions advertising festival earlier this month. Alcohol marketer Diageo led a session on the subject, where CMO Syl Saller discussed how creativity and data can work together. She cited research that found 72% of marketers think measurement interferes with creativity.

Consumers, on the other hand, increasingly expect highly personalized messages from brands, which can often be most easily achieved through data, However, data privacy controversies, such as Facebook's Cambrdige Analytica scandal, have have made some leery about what data they share.

Facebook announced in March that it was shutting down its Partner Categories program that helps target ads based on third-party data, as noted by the Journal. Acxiom, one of the partners affected, said the change could impact its revenue and profitability by up to $25 million in 2019.