In the early days of digital, providers of marketing services could get away with focusing on innovative point solutions. But as always-on consumers now exist in an omnichannel world, those same marketers find they need to have across-the-board expertise, from database management to in-store selling. It’s because of this environment that Alliance Data Systems has agreed to acquire Hyper Marketing Inc. (HMI) on behalf of its marketing services division Epsilon for approximately $460 million. HMI is a network of marketing services providers that include digital agency SolutionSet and shopper-and-retail focused agency Catapult.
Through this acquisition, which Epsilon CEO Bryan Kennedy expects to close by the end of the year, Epsilon will add key talent—including HMI CEO Zain Raj—and some major clients, including Mars, Unilever, and The Home Depot. Within Epsilon’s top 30 individual enterprise customers, Kennedy says, the two companies already share around a dozen clients and in many of those cases already have a complementary relationship.
Ultimately, the HMI acquisition is expected to give Epsilon new capabilities, such as user interface design, mobility, social business platforms, and websites—and these new capabilities are expected to facilitate Epsilon’s continued expansion into areas like consumer packaged goods (CPG).
“If you look at CPG,” Kennedy says, “it’s a high growth vertical for Epsilon, where we’ve been focused on building out database solutions, CRM programs, and have a large email and digital messaging business that’s very important there, as well.” Using HMI assets, Kennedy says, Epsilon will be able to expand what it can offer to the CPG space. For instance HMI agencies like Ryan Partnership—with expertise in customer behavior—and Catapult—with expertise in the retail space—allow Epsilon to use its data assets to develop and nurture individual relationships with customers. “Both Ryan and Catapult groups have deep experience in activation and shopper marketing,” Kennedy says, “which isn’t where [Epsilon] plays.”
Ultimately, Kennedy believes that integrating services like shopper marketing expertise will boost his company’s value proposition in the CPG space—an industry that’s increasingly looking for innovative ways to drive purchasing and customer relationships both in-store and online. In Kennedy’s example, Epsilon will provide data and information; HMI will provide the strategies and tactics that drive in-store traffic.
If anything, the needs of CPG marketers can be extended to marketers across all verticals. “This whole idea of customer connections is important,” Kennedy says. “Not just understanding who the consumer is and having analytics and insight and data, which is the Epsilon core, but to take strategy and creative and brand planning and really inject meaningful messages into channels to create those connections into brands.”
Both HMI and Epsilon expect the acquisition to provide marketers the full services to do what they’ve always sought to do, even before the advent of digital: create a bond with consumers. “As marketing becomes more one-on-one, as we touch the right customers at the right points in time with the right content and insight, it creates the ability for the new world of marketing,” says HMI’s Raj. Brands, he says, are built by generating real emotional connections with consumers. “When there’s an emotional connection a customer has with products and services, this is what we believe will drive brands forward.”
The agreement to acquire, Kennedy says, happened quickly—over the past few months—and details around branding and company structure have yet to be worked out.
