MUMBAI: Publicis, the world‘s number three advertising group, has agreed to acquire U.S.-based Rosetta Marketing Group for at least $575 million to enhance its digital and interactive marketing service offerings.
The French company‘s buyout further underlines the growing importance of web display advertising, as Internet video and social media continue to rise.
Publicis targets to increase its revenue derived from digital (28 per cent in 2010) to 35 per cent over the next three years, the company asserts.
This transaction occurs as the most recent ZenithOptimedia forecasts (April 2011) predict that the Internet will overtake newspapers to become the world‘s second-largest advertising medium in 2013.
Under the terms of the agreement, in addition to the initial transaction value, Rosetta‘s manager-shareholders could receive a potential deferred payment in 2014 based on the agency‘s performance in 2011 – 2013, Publicis said.
Princeton-based Rosetta, will become part of Publicis‘s VivaKi digital arm and is expected to have an annual revenue of nearly $250 million in 2011.
Rosetta will operate as an autonomous, stand-alone brand within Publicis Groupe under the leadership of Rosetta‘s founder and CEO Chris Kuenne, who will remain at the head of the agency, reporting to Publicis Groupe COO Jean-Yves Naouri.
Publicis Groupe chairman and CEO Maurice Levy commented, “The acquisition of Rosetta is a key next step in our strategy to become the ‘human, all digital agency group. With Rosetta, we aim to enrich our digital knowledge, our capabilities in technology, marketing consulting, and digital strategy, and the creativity we offer to clients and advertisers. This is consistent with our commitment to anticipate and meet their needs in the rapidly-evolving advertising and marketing services landscape.”
The addition of Rosetta to Publicis‘ other digital businesses — which include Digitas, Razorfish and Publicis Modem – will bring Publicis Groupe‘s annual revenue derived from digital activity to more than 30 per cent, the company added.
Kuenne added, “We recognise that in order to achieve our long term business and geographic growth potential, we need the reach and resources of a global group, and we are particularly proud to be joining one of the most advanced digital communications groups in the world.”
The transaction is expected to close during the second or third quarter of 2011, and is subject to customary closing conditions, including clearance under the United States Hart-Scott-Rodino Antitrust Improvements Act.
