Publicis, Facebook set marketing deal in 'hundreds of millions': source

(Reuters) - French advertising agency Publicis Groupe SA and Facebook Inc have struck a multi-year digital marketing deal worth hundreds of millions of dollars, according to a person familiar with the matter.

The deal will focus on video ads that appear on Facebook's social network, as well as ads that appear on Instagram, the mobile photo-sharing app owned by Facebook, according to the source, who spoke on condition of anonymity due to a lack of authority to talk publicly about the deal.

Under the terms of the deal, Publicis would have access to Facebook user data, enabling it to gauge ad performance on the social network, as well as access to Facebook engineers and other resources to help create special ad units that appear on Instagram, according to Ad Age which first reported the deal on Monday. Ad Age said the deal was worth $500 million.

Facebook declined to comment on the terms of the deal but said in an emailed statement that the partnership with Publicis "will center on bringing clients closer to our products, and creating new planning and measurement tools to make buying easier, more efficient, and ultimately prove out ROI (return on investment)."

The deal will be managed by all Publicis agencies in North America followed by a global rollout, Publicis-owned Starcom MediaVest Group's Anita Mcgorty told Reuters.

Starcom MediaVest led the negotiations for the deal.

The deal comes days after Publicis and Omnicom Group Inc decided to terminate their proposed $35 billion merger, the uncertainty surrounding which had led both companies to lose business worth more than $1.5 billion in April.

Facebook shares were up 2 percent at $59.22 on the Nasdaq on Monday afternoon.

(Reporting by Alexei Oreskovic in San Francisco, and by Subrat Patnaik and Sampad Patnaik in Bangalore; Editing by Joyjeet Das and Eric Walsh)