ABR 2011: Epsilon
: Bryan Kennedy, president and CEO
Ownership : Alliance Data Corp.
Offices : 27 wholly owned globally; 14 in US
Revenue : Global: $613.4 million; US: $585.4 million
Epsilon expects to be a $1 billion marketing services firm by next year, which would put it neck and neck with competitor Acxiom in terms of sales, as well as on par with the size of creative agency giant Wunderman. The firm's growth is fueled by acquisitions, new business from existing clients and expanded services offering and global presence. In 2011, the once US-focused firm expects to open offices in Japan and India.
"We have an incredible sense of urgency to grow, not just because we like to be big but because we think the whole market is moving right now," says Bryan Kennedy, CEO and president for Epsilon. "Brands are struggling to put together what the right marketing strategy is and how to execute that in real time and in a multichannel way."
Known for its deep background in data and database marketing, Epsilon has made a concerted effort to deepen its creative marketing chops. In April, it announced plans to acquire Aspen Marketing Services, an almost $250 million firm, which it will merge with its existing creative agency, Purple@Epsilon, under the Aspen name, increasing its footprint and deepening expertise in consumer promotion. It also acquired the Equifax direct marketing services division in July 2010.
"We constantly hear from clients that they're looking for a provider that can bring these disparate capabilities together to go to market for them in an integrated fashion," says Kennedy.
Epsilon's core offerings now span CRM, loyalty management, data services and management, analy-tics, search, and creative services in social, email and direct mail.
Epsilon's top clients include blue chip names such as Unilever, Citi, JP Morgan Chase, Hilton and Best Buy. In the last year, it won new email marketing responsibilities with 1-800-Flowers, Sears and Barclaycard. It also added an integrated account with Kraft Foods, Gevalia coffee brand, which is launching in US grocery stores this summer.
The agency increased its staff count by nearly 18% in 2010, compared with the prior year. It now has 2,313 employees across 14 US offices. Aspen will increase its global offices by 11, bringing it to 38. Epsilon added Terry Young as president of Purple@Epsilon late last year, but he left following the Aspen acquisition.
US revenues jumped 20% year-over-year to a total of $585.4 million in 2010. Loyalty programs and work for CPG, retail and pharmaceutical industries fueled growth, while the publishing and nonprofit sectors grew at the slowest rates.
Kennedy says Epsilon is beginning to perform more work for multinationals overseas in Asia-Pacific, Europe and the Middle East, although international revenues total only $28 million. All told, it was a busy but successful year for Epsilon, marred perhaps only this March when a data breach exposed customer email addresses housed by Epsilon for a range of companies, including Chase, Walgreens and Best Buy. The incident called into question the security of its data.
"We recognize there is no real place for us to play except to be at the top of the industry in terms of investment in security," Kennedy says.