Two global advertising companies were expected to submit bids Thursday to acquire a significant part of Acxiom's business, The Wall Street Journal reported.
Acxiom, which has a market capitalization of $2.3 billion, is selling its data-marketing division, the newspaper said. The division generated $697 million for the fiscal year that ended March 31. The sum represents about 75 percent of the company's total revenue for the year.
The division could be acquired for between $1.5 billion and $1.8 billion, according to the newspaper, which cited people familiar with the matter.
Interpublic Group of Cos. and Dentsu Inc. were the advertising holding companies the Journal identified that were expected to make bids by Thursday's deadline.
Interpublic Group is based in the United States and is home to agencies that include McCann Worldgroup and Mediabrands. Japan-based Dentsu owns media agency Carat and agencies such as 360i, iProspect and McGarryBowen.
They and other advertising holding companies are under pressure to beef up their digital marketing as consumer data becomes an increasingly important ingredient in the ad-buying process and undercuts their traditional strategy of using size and purchasing power to get the best prices for their clients, the newspaper said.
Customer data that Acxiom collects can help marketers develop applicable ads for consumers, target the messages to the right audience and measure how successful the ads are.
Acxiom executives, including Jerry Jones, chief ethics and legal officer and executive vice president, didn't return telephone calls Thursday.
Acxiom shares rose 76 cents to close Thursday at $30 on the Nasdaq exchange.
That Acxiom decided to sell its data-marketing division, called Acxiom Marketing Solutions, and keep its other principal segment, LiveRamp, makes sense if the Journal report is correct, said Lawrence Berlin, a senior vice president at First Analysis in Chicago.
First Analysis follows Acxiom, but the two companies have no financial relationship, Berlin said.
The data-marketing division "is much more of an established business," Berlin said. "It's not high-growth in the same way LiveRamp is. LiveRamp is a fresher business, it's a new business."
LiveRamp is known as a data onboarding company, which brings offline data online for marketing applications. The offline data often comprise information critical to a company's business but which have been difficult to connect to online users effectively and without compromising consumer privacy, according to a company primer on the concept.
LiveRamp has turned profitable, "so the margins are expanding nicely," Berlin said. "It's got a very dominant position in the industry, so it made it more attractive" to keep.
Business on 06/29/2018