Why the Deal Between Publicis and Facebook Is a Very Big One
Publicis Groupe and Facebook have inked a multi-year ad partnership, both companies announced yesterday. While terms were not disclosed, AdAge is reporting that the value of the deal, including spending, will be around $500 million, making it the largest deal yet between an ad-agency holding company and a tech company.
Under the terms, Publicis's agencies and their clients – which include powerful brands like Procter & Gamble, Walmart, Bank of America, McDonalds and Coca-Cola – will receive discounted rates on a range of Facebook products as well as access to Facebook's user data and engineers, sources told AdAge. User data will allow Publicis to track ad performance on the social network, and Facebook's engineers will help create special ad units for Instagram, the mobile-photo sharing app owned by the company.
"When you look at the composition of the entire partnership, there are aspects benefiting Publicis, whether it's a first look and a competitive advantage of moving quickly on some of these elements," Carolyn Everson, vice president of global marketing solutions at Facebook, told the outlet. "This is the first time we have all of the different elements that will allow clients to reach a significant scale of 100 million people a day in the U.S. and [specific] audiences within the 100 million the client wants to reach."
Facebook has steadily been convincing once wary advisers that its digital and mobile ads offer a good return on investment. Last month, the social network reported that revenue was up 72 percent from the first quarter of 2013 ($2.5 billion versus $1.5 billion) and ad revenue was up 82 percent from the same quarter last year, reaching $2.27 billion.
This is not the first time Publicis has made headlines this month. The advertising holding company's deal with Facebook comes just days after its proposed $35 billion merger with U.S.-based advertising giant Omnicom Group Inc. crumbled, primarily due to internal culture clashes and power struggles.