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Facebook partners Publicis Groupe

Publicis Groupe, the world's No. 3 advertising holding company, has struck a sprawling partnership with Facebook, the companies said Monday morning. 

Terms were not disclosed, but an executive familiar with the matter said that the value of the deal including spending would be around $500 million.

"Publicis and Facebook are announcing a multi-year partnership focused on co-creation of product around data, video and images, including core Facebook and Instagram," said Laura Desmond, CEO of Starcom MediaVest Group, which led negotiations for the deal. 

The pact is currently focused on North America but the companies said they planned to discuss global expansion "down the road."
New products are typically custom ad units. 

For example, Facebook and Leo Burnett Chicago in 2011 created a custom question-and-answer ad unit for the social media site.

The deal, easily the largest yet between an agency holding company and a tech company, would pool global spending from Publicis media networks Starcom MediaVest Group and Zenith Optimedia as well as large digital shops like Digitas, Razorfish and Rosetta.

Both companies declined to comment on inventory commitments and deal value, insisting the agreement wasn't centered on spending.

The agencies and their clients -- which include Procter & Gamble, Verizon, Walmart and Coca-Cola -- will receive benefits such as favorable rates on a handful of Facebook products, according to people familiar with the matter. The companies declined to comment on rates.

Facebook and Starcom MediaVest Group said the deal, which was five to six months in the making, includes the integration of Facebook data into Publicis' media-mix-modeling platform, allowing Publicis to see how Facebook ads are performing; a task-force around rich measurement; and the integration of a Publicis "content-at-scale product" into the recently announced Facebook ad network.

Both companies were vague about specific components that were exclusive to Publicis, but they said the shops would gain access to Facebook insight, engineers and creative talent to create special ad units or content for Instagram.

Facebook last month reported revenue of $2.5 billion for the first quarter of 2014, up 72% over the previous year. Ad revenue grew 82% year over year, reaching $2.27 billion, with the balance coming from payments and fees.

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