Epsilon has the biggest agency you might not know
Last month, the smoking-cessation gum Nicorette rolled out a campaign that focused on the reasons people quit smoking. The campaign used celebrities like ballroom dancer Shirley Ballas in long-form films that detailed their quitting journeys.
John Immesoete, chief creative officer at Epsilon, gives this as an example of “data-driven creative,” since for years, smoking campaigns have focused on the health benefits of quitting instead of the personal and emotional reasons why people quit.
The campaign was informed by in-depth customer data that Epsilon, one of the country’s largest sources of email and marketing data, had pulled. The actual creative came from the 400-person agency Immesoete leads within Epsilon — an agency that has now become the largest agency by revenue in the U.S., according to AdAge Datacenter. Revenue in 2014 was $1.4 billion, outstripping more well-known networks like Leo Burnett and FCB.
Ed Heffernan, CEO at Epsilon parent ADS explained the “one-stop shop” approach in an earnings call like this: “We believe that there’s a huge market out there for CMOs who want all the technology that we have, all the creative that we have, but also wrapped together with services — so they can pick up the phone with one throat to choke.”
Leading that transformation is Immesoete, who joined in 2013 when his agency, The Ryan Partnership, was sold to Epsilon for $450 million, part of the company’s attempt to become a true agency business. Since then, the company has hired agency vets like David Shih, formerly of Leo Burnett and DDB, and Corey Cisek, also formerly at DDB.
The offering is modern, said Immesoete: The idea is that the data Epsilon collects can be used to drive creative that is rooted in better strategy and consumer insights. “A traditional agency is the same operation it was in the ‘Mad Men’ days,” said Immesoete. “Now, it’s a model that’s failing.”
Epsilon is part of a wave of “new agencies,” (some old-school execs prefer “faux-agencies”) that include consulting companies with agency arms, like Deloitte Digital, Accenture Interactive and PwC, as well as data providers like Experian and Acxiom, all of whom are now becoming a bigger factor in the agency world. They’re relatively small in comparison to their parent companies — Epsilon overall has over 8,000 employees — and creative-and-marketing services are often see as add-ons to those companies’ core businesses.
One reason for the shift, according to a search consultant who works with some of these agencies, is that clients are increasingly smarter about the data that goes into creative work and less focused on the “intuitive idea” — and they also want to go to specialists who can do it all, since it cuts costs.
“The intent of these companies is to disintermediate agencies, particularly in the areas of data management,” said another search consultant, Ann Billock, partner at Ark Advisors. However, clients are still figuring out to what extent these companies have broadened services and can provide good creative as well.
Epsilon claims to have won 14 out of 17 pitches in the past year — the most recent for a “big spirits company.” The pitch to clients in each case centered on the data expertise Epsilon can combine with the creative assets.
“We have things other agencies don’t have access to,” said Immesoete. “And you can see things bubble up.”
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