BRYAN KENNEDY: The strategy Conversant laid out before we came along was to invest in the businesses grounded in first-party transactional data.
Epsilon brought another level of insights from our data business, which is historically in the authenticated, offline world. We’ve been putting those two together to give our clients a richer ability to understand their consumers.
Why has Epsilon been slow in pivoting the Conversant business?
KENNEDY: We can operate as a point provider in any single discipline, but our greatest strength is when we can be an end-to-end provider. A lot of the market recognizes that but some are still moving around to that that point of view.
This particular piece of the business that was a drag on our growth doesn’t deliver any profit for us. When parts of your business may not be driving a lot of economic value [and] you spend time trying to fix or get rid of them, you're taking away valuable resources from offerings that are growing.
Our strategy has been to focus on the core piece of our business, Conversant’s CRM business that’s growing over 30% every quarter. We’re winning new clients and bringing that solution into large, enterprise Epsilon relationships. We’re slow to address some other parts of the business because they’re not urgent in terms of priority.
What specifically are the issues with pivoting the solution and getting rid of parts of the business that no longer work?
KENNEDY: Part of this is just the market itself. Epsilon was oriented around transactional data, understanding consumers and being able to reach them. But when it came to digital, the market was still in a state of flux. A lot of digital media execution was built on generic audience identifiers as opposed to one-to-one across devices to tailor personalized messaging.
A lot of the issues we’ve seen have been more a function of a market that likes the idea of personalization and one-to-one but has very little ability to execute. It’s taken some time for us to help the market understand what we have vis-a-vis the competition with agencies and software-as-a-service options.
Are you trying to take business from agencies?
KENNEDY: We’ve always been in that “co-opetition" category when it comes to agencies. Media-buying agencies are clearly out to command and keep as much of [their clients’] budgets as possible. They are certainly still among our clients, but we have unique opportunities they don’t.
Many of our clients are looking for an opportunity to understand what the customer looks like in a cross device world on their own and to reach individuals as opposed to broad audiences. We have an advantage when it comes to that versus most of the large agencies, so that does put us in a position of potentially competing with them.
RIC ELERT: Over time we've built up trust with our agency partners. We want to work with them and the client to deliver solutions. In some cases, we see agencies white-boxing our technology. It's taking that time to pivot from delivering something to really collaborating with the agencies, where they can take a direct stance with the client and we support them, or we can take a direct stance and work in concert. You have to let a little time go by so they don’t feel like they’re going to get burned.
What still needs to be accomplished? What's on the road map?
ELERT: Leveraging a tighter bond between loyalty and all of Conversant’s digital assets is a big piece. Loyalty programs want to converse with their members and we give them a platform to have that personalized interaction with digital messaging.
Also leveraging the Epsilon Harmony email platform so we can provide more continuity of voice across more touch points. We have products underway where you can deliver an email to an individual tied to our digital profile with real-time data. Instead of a giving them stale message, you give them a live message off our digital profiles. When we have joint Epsilon/Conversant clients, we’re working on making it easier for the data to flow so that it can enrich each other.
Does Conversant still play as prominent a role in Epsilon's plans as it did when it was first acquired?
KENNEDY: Absolutely. What you’d see now if you took the lid off of Epsilon and Conversant is a very tight coordination of strategy and road map. We feel more like a marriage of equals than one company absorbing another. We have in Conversant an incredibly powerful digital platform with growth and measurable value for our clients. We have in Epsilon a multi-offering footprint ranging from data to agency to big tech solutions. We’re seeing more and more the ability to tie those together in a simple solution for clients.
A prominent part, if not the center, of our growth strategy is how you leverage the power of digital advertising opportunities within [Epsilon’s] larger enterprise client relationships. We’re still right at the beginning stages of tackling the opportunity in front of us.
This interview has been edited and condensed.