Alliance Data Systems Joins The Digital Marketing Conversation

Alliance Data Systems Joins The Digital Marketing Conversation: To Acquire Conversant

Credit card processing company Alliance Data Systems Corp is all set to buy digital marketing company Conversant Inc for $2.3 billion in both cash as well as stock. The acquisition has been tailored such that Alliance Data will acquire Conversant for $25 per share. The deal will close by the end of the year, according to a Reuters report.

Through this acquisition, Alliance Data is all set to gain the technology which will enable it to distribute advertising across the Internet and ensure that the effectiveness of the marketing campaigns is measured accurately.

Conversant itself has donned many hats. It was earlier known as Value Click. According to the statement released by Alliance Data, the acquisition will be structured such that 48% will be cash while the rest will be stock. Conversant is currently located in Westlake Village in California. It is currently being valued at 10 times more than its expected adjusted earnings prior to tax depreciation, interest and amortisation.

Conversant focuses on affiliate marketing. This is a field where companies personalise ads and use it to target online users based on their previous searches on the internet either through the mobile or the PC. This service and technology will now be added to Alliance Data's loyalty marketing services, like as a private label credit cards and airline miles programmes.

This is a novel way to boost customer loyalty and ensure paybacks for big spending. Digital marketing technology is now being used to boost the chances of initiating a more personalised advertising experience. Around 50 cents per share will be added to the earnings within the first year, while 75 cents will be added around the second year, according to Alliance Data.

Alliance Data itself is a US based Texan company which has grown interested in this field for some time now. Digital marketing and online companies have created a reality in the virtual world. With social media also plunging in along with celeb websites and endorsements by sports persons, there is literally a whole set of competing stimuli as far as the consumer is concerned.

But this does not mean a din. It could also be a medley where each method gets its turn. What is the winning number is the use of personalised digital marketing and linking it with consumer rewards programmes. Using principles of conditioning and creating a strong connect between brands and reward, the companies can then capitalise on the inner workings of the human mind.

Perceptions are more important in the ad world than reality. Perhaps this is why digital marketing is so effective. After all, it is within a virtual world at the end of it all. One might even see the real world as an illusion in many ways. What perhaps remains the only reality is that personalisation sells, in the virtual world or the real.