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Merkle’s Evolution, From Direct to Digital

When Merkle launched as a direct and database marketing agency 30 years ago, it had no idea how relevant these skill sets would be to digital marketing in the future.

Fast-forward to today, and Merkle’s expertise handling first-party data, building CRM databases, and resolving customer identity are at the heart of marketers transitioning to a post-cookie world.

What’s Old is New Again

“What’s old is new again,” said long-time Merkle exec and new global CEO Craig Dempster. “If you can get the DNA of a digital marketer and that of a database marketer connected, that’s where some magic can happen.”

Since 2006, Merkle has grown from 350 employees and $60 million in revenue to almost 10,000 employees and more than $1 billion in revenue. That journey included a shift to programmatic and digital agency services in 2009 after seeing a trend to host new types of data in marketing databases and leveraging digital data and impression level data in their digital spend. This is when Merkle realized these databases were not just going to be the tools of the future for the direct marketer, but they would also be connected to myriad customer touch points. They would also become enterprise assets for the CMO in marketing communications.

“Traditional agencies didn’t understand PII or database marketing skills, nor were brands going to allow those agencies access to their consumer data,” Dempster said. “But we had that trust and the right expertise to drive measurable results.”

Since Merkle’s acquisition by Dentsu Aegis Network in 2016, we have continued to move forward with more global expansion including several acquisitions spanning across EMEA and APAC. Merkle continues to provide Dentsu with technology skill sets to drive competitive differentiation in the marketplace, with Merkle’s proprietary platforms (Merkury - providing identity resolution, and audience delivery to intended ad platforms and M1 - providing Dentsu media planners with audience development, planning, and delivery) being one of the biggest investments.

Looking to the Future

Merkle’s eye is on customer experience transformation, believing in: Data transformation + Digital Transformation = Customer Experience.

Having been investing in our identity capability for 30 years, it continues to be a big focus for Merkle this year and in the future, especially with the impending crumble of the third-party cookie over the next two years. We’ve modernized our approach in order to further leverage M1 and have made significant investments. Statistics show identity is currently about a $900 million space and projected to grow over the next three-four years to $2.2 billion, which we can attribute to many things including the death of the third-party cookie, increased privacy legislation, and direct-to-consumer business models. We’re seeing an increased need and expectation of brands to connect disparate sets of data to create a real understanding of consumers in order to have ongoing communications.

Want to learn more? Check out this AdExchangers podcast featuring Craig Dempster as he walks through Merkle’s journey and plans for the future, including continued international expansion, growth in the customer experience realm, and potential acquisitions.

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