Ad Giants Expected to Bid Over $1.5 Billion for Acxiom's Customer Data Business
June 28 2018 - 11:31AM
Dow Jones News
By Suzanne Vranica and Alexandra Bruell
Advertising giants Interpublic Group of Cos. and Dentsu Corp.
are expected to submit offers to acquire most of data broker Acxiom
Corp. ahead of a Thursday deadline for bids, according to several
people familiar with the matter.
Acxiom, which has a market capitalization of $2.3 billion, is
selling its data-marketing division of the company. The unit
represents about three-quarters of Acxiom's total revenue in fiscal
2018 and specializes in housing and managing reams of customer data
from clients such as retailers and financial-services firms.
Acxiom announced a "strategic review" of that marketing services
business in February. The division, which generated $697 million in
revenue for the fiscal year ended March 31, could fetch between
$1.5 billion and $1.8 billion, according to some of the people
familiar with the matter.
Possible acquirers submitted expressions of interest in April.
Final bids for the Acxiom unit are expected Thursday. IPG and
Dentsu are expected to make bids, according to some of the
people.
Ad companies have long used their size and purchasing power to
negotiate the best prices for their clients. But the rise of
digital marketing has upended the business and made consumer data a
critical ingredient in the ad-buying process.
As a result, ad firms have been under pressure to beef up in
that area. In 2016, for example, Dentsu bought data-marketing firm
Merkle.
Dentsu and IPG are among the world's largest ad holding
companies. Dentsu, headquartered in Japan, owns media agency Carat,
as well as agencies like 360i, iProspect and McGarryBowen.
U.S.-based IPG houses agency networks like McCann Worldgroup and
Mediabrands.
Customer data helps marketers and agencies craft relevant ads
for consumers, target those messages at the right people and
measure their effectiveness. Without access to large amounts of
data, agencies and marketers have to rely more heavily on Facebook
Inc. and Alphabet Inc.'s Google, which tend not to share much
consumer data with advertisers.
Doubling down on data comes with risks at a time when companies
that traffic in consumer information are under increased scrutiny,
especially after revelations earlier this year that data-analytics
firm Cambridge Analytica improperly accessed and retained Facebook
user data obtained from a professor.
The uproar over that incident fueled calls for data-privacy
legislation in the U.S. Meanwhile, Europe recently began enforcing
General Data Protection Regulation, a sweeping new privacy law that
often requires companies to get users' consent to gather personal
information and requires companies to be more transparent about the
information they collect and how it is used.
Acxiom's business has been affected by the issues. In March,
Facebook, in an attempt to shore up its data-privacy practices,
said it would discontinue Partner Categories, an ad-targeting
option that allowed advertisers to use data from data-brokers such
as Acxiom to target specific audiences on the social media
service.
(END) Dow Jones Newswires
June 28, 2018 12:16 ET (16:16 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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