Epsilon Will Move up the Digital Marketing Value Chain With Aspen Buy

Archived Published: 02 May 2011 ID: G00213029

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Epsilon will acquire Aspen with its marketing services for earned media and strategic agency services. The deal will enable Epsilon to boost its growth as traditional database marketing becomes a more standardized service.

News Analysis


On 25 April 2011, Alliance Data Systems announced an agreement to acquire Aspen Marketing Services, a privately held marketing services agency, for $345 million plus a “working capital adjustment.” Aspen's 750 employees will become part of Alliance's marketing service subsidiary, Epsilon. Aspen will become part of Epsilon's agency division, Purple@epsilon, which will change its name to Aspen. Alliance expects to close the deal in 2Q11 if regulators approve.


This acquisition will accelerate Epsilon's move into more sophisticated capabilities, particularly earned media (that is, impressions garnered through people not paid to talk about a brand). Marketing executives, particularly from the consumer sector, demand more focus on earned media from their agencies, and Aspen focused early on helping clients market through social networks. Aspen's capabilities will supplement Epsilon’s strengths in classic database marketing and other marketing services that stem from paid or owned media (media that is either bought or that the company controls, such as websites, third-party data, paid search, and customer e-mail and prospect lists). Aspen will give Epsilon:

  • Sophisticated response marketing, especially through the dissemination of large-scale one-to-one communications

  • Broad reach into new industries such as automotive and telecom

  • A stronger position in strategic agency services for chief marketing officers

However, Epsilon must retain Aspen's talent to get full benefit from this deal. Cultural differences often lead to the exit of personnel after mergers bring together companies that compete in different types of markets. Epsilon’s decision to adopt Aspen as the name of its agency division may reflect an attempt to overcome the damage sustained by its own brand in the wake of highly publicized security breaches.

Aspen will benefit from Epsilon's financial resources and large customer base into which Aspen can sell its digital, direct, social, experiential marketing and agency services.

Epsilon’s move and MDC Partners' recently acquired majority stake in Team Enterprises signal increased interest by traditional marketing providers in new, fast-growing markets such as social media and mobile. Like Epsilon, most traditional marketing service providers such as Acxiom, Experian and Harte-Hanks have focused on selling tactical solutions around database marketing, third-party data and e-mail marketing. But database marketing services are becoming standard. Therefore, Gartner predicts that marketing service providers will continue with these kinds of acquisitions to boost growth.


  • Epsilon customers: If you need to market through social networks, consider Aspen.

  • Aspen customers: Before making further investments, wait for Epsilon to issue a road map for digital marketing after the deal closes, and watch for signs that key personnel are leaving.

  • Traditional database marketing firms: Consider acquisitions as a way to attain earned-media service lines and talent. Those that act by 1H12 will improve their competitive position; waiting will only risk paying a price premium. Growing these services organically will likely not prove to be a winning strategy.

  • Social media marketing firms: Review your long-term strategy. With larger, established marketing firms acquiring new capabilities, social media marketing firms must decide whether to focus on building a complete suite of marketing capabilities or on accelerating efforts at innovation in their own area to stay ahead of competitors with broader offerings.

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