A Cincinnati-headquartered marketing company is shedding its typically quiet demeanor as it details an acquisition deal that “fortifies its position as a powerhouse” in the industry, its top executive said. While the firm it procured is based on the West Coast, the deal could still accelerate hiring in the region, pushing its local headcount over 100.
Claritas, which calls Sycamore Township home, acquired Bay Area-based ArtsAI, an AI-powered marketing firm, effective Sept. 1.
Terms of the deal were not disclosed.
For Claritas, it marks the company’s fourth acquisition since its spinoff from data and analytics giant Nielsen in 2017 – but its first since January 2019, when it closed a series of three consecutive deals in a 12-month span.
Claritas CEO Mike Nazzaro said the company, which is backed by one of the biggest names in private equity in the Carlyle Group, has been methodically heads down building, deep in the weeds as part of a five-year transformation effort.
The company wasn’t necessarily looking to do another deal, he said, but ArtAI’s tech – and its extremely fast growth – were huge attractors. ArtsAI ranked No. 29 on this year’s Inc. 5000, with three-year growth of 10,658%.
The hope is ArtAI's capabilities will help predictably drive more personalized and profitable campaigns. Collectively, the two companies serve more than 1,300 clients, including brands like Progressive and T-Mobile, agencies like Horizon, MediaCom and Hearts & Science and publishers like iHeart and SXM.
“It was too good an opportunity to pass up,” Nazzaro told me. “When we first came into the business, we had our thesis, we did our transformation and M&A (work) early and we've spent the last three years taking this to the marketplace. AI is where the industry is going, and it will help fortify Claritas as an even bigger marketing powerhouse, but more so, it put us on the forefront of this technology.”
Claritas, founded in 1971 within Nielsen, has evolved over the past couple years into a “closed-loop” system that helps marketers find customers using data and technology. It works to identify, or to find who the target buyer should be; deliver, or execute media; and optimize campaigns, measuring data in near real-time.
The company, in its earliest days, only really offered an identify solution, Nazzaro said. It now covers the entire marketing spectrum.
All of that is powered by its identity graph, or a database that stitches together records from all data sources to create a customer profile, he said.
Claritas has assembled one of the industry’s most robust identity graphs encompassing a proprietary data set of 125 million households and reaching more than 600 million devices daily in the U.S., according to the company.
“We have a very deep, rich view of the American consumer, (from) purchase data to what media they consume,” Nazzaro said. “It’s a radically different business today. It's much more marketing centric versus research.”
When it comes to ArtsAI, that firm competes in a similar market to Claritas in terms of optimization, or how ad campaigns are measured. That strengthens what Claritas can offer, Nazzaro said.
But ArtsAI’s newest product, AI Personalization, is so far producing some incredible results, he added. It leverages AI tech to optimize the creative of an ad – which headline, visual component, voiceover or color would best match with the consumer receiving the message. When that ad garners a “conversion,” it uses machine learning to deliver the right combination to the next, similar consumer.
Adding ArtsAI will “add new levels of intelligence that will deliver product advancements that do not exist today,” Jim Brennan, a senior partner at Boston Consulting Group, a global management consulting firm, said in a news release.
Boston Consulting Group’s clients span the public and private sectors and touch a variety of industries, including retail, technology, industrial goods, energy, and health care.
“Claritas’ acquisition of ArtsAI creates something very unique,” Brennan said. “The capabilities Claritas will now bring to the market provides the advantages of AI across the entire marketing lifecycle, from customer identification and message delivery to campaign measurement and ROI optimization.”
With the deal, ArtsAI brings roughly 30 people to the Claritas team. Nazzaro said the expectation is the company will retain 100% of ArtAI’s employee base, including several senior leaders who will become senior leaders in the combined company.
Currently, Claritas employs about 300 people around the country with other outposts in cities including San Diego, Miami and New York.
Cincinnati stands as its largest office, with around 75-80 team members.
Nazzaro said he expects that local count to grow to 100 by the end of the year, a number he said was a pre-acquisition target.
ArtsAI will indirectly accelerate growth in the region as Claritas looks to fill new data science, analytics, IT, client service and sales roles.
“When we started, we had two people here. There's a really strong foundation for Claritas to continue to grow in Cincinnati and beyond,” Nazzaro said.
