The ad industry has been relying more and more on data to meet the needs of their clients. Over the past five years large advertising holding companies have been acquiring, investing in, or launching big data companies. The aim is to bolster their advanced data and technology capabilities to better compete with Facebook, Google, to meet the needs of their clients and as a part of their core competency when pitching new business accounts.
Earlier this year WPP launched Choreograph, a global data company. WPP joins a number of rival holding companies. In 2016, Dentsu had acquired a two-thirds ownership stake in Merkle, a data driven performance marketing agency at an estimated $1.5 billion. In April 2020 Dentsu exercised its option to fully acquire Merkle. In 2018 IPG acquired Acxiom’s data marketing division for $2.3 billion. The following year, Publicis acquired Epsilon, a data-driven marketing agency for $4.4 billion. In the meantime, Omnicom
With agencies now emphasizing their data proficiency, Jay Pattisall, Principal Analyst at Forrester Research
Pattisall adds, “They all fundamentally enrich data and insights for clients’ brands and marketing, but achieve that in different ways suitable to the agency’s structure. At IPG Acxiom and Kinesso create a series of data and audience tools that the IPG agencies can customize to each agency’s proposition. While Omnicom’s Omni platform functions like an agency operating system combining planning and buying tools with asset management and creative tools. Epsilon, Choreograph and M1 are all platforms but also businesses inside the holding company with services attached to them as well.”
“Data and audience platforms inside agencies are primarily tools for media planning and buying and most visible in media agencies. But over the last 18 months platforms like Omni, M1, Epsilon People Cloud and Acxiom are branching out into other parts of the holding companies like PR, Healthcare and creative/content. This is a strong signal of deeper integration.”
WPP’s Choreograph will enable their clients to use their own privacy compliant first-party data as the use of third-party cookies will soon be discontinued. Choreograph will consist of 700 data and tech experts worldwide from WPP agencies GroupM and Wunderman Thompson. WPP said Choreograph will develop the capabilities required to partner and empower their clients to properly use their first-party data for advertising purposes. This could potentially include overseeing their clients’ first-party data with the goal of expanding sales. Among the core capabilities cited were insights and planning, private identity tools, media optimization, predictive analytics, strategy consulting, tech development and managing data. Walgreens Boots Alliance is the first Choreograph client.
The Japanese based holding company, Dentsu had said their acquisition of Merkle provided the agency with improved analytical skills for first-party data, enhancing their digital media capabilities among other capabilities. Merkle also allows for more data-driven solutions to improve a brand’s return-on-advertising-investment and e-commerce strategies, and for Merkle’s own consulting.
At the time of the acquisition, the U.S. based Merkle had more than 650 global clients, could access 150 marketing databases and managed over 3.7 billion first-party consumer records. Furthermore, the Dentsu acquisition enabled Merkle to expand globally. In July, Dentsu acquired LiveArea, an agency focusing on the customer experience and commerce for $250 million. LiveArea will be folded into Merkle.
IPG’s acquisition of Acxiom gave the holding company access to large sets of anonymized customer data. This enabled IPG to better target consumers with more contextual ad messages used for purchase consideration and purchase preference. Acxiom operates as a standalone unit within IPG and has been integrating within the agency breaking down the existing silos between traditional and digital media. In June 2020, SpotX, a global video ad platform now part of Magnite. announced a partnership with IPG’s Acxiom. With the emergence of data enriched programmatic buying and hyper-targeted addressable advertising, the goal has been to provide greater audience-based buying capabilities by combining data assets The IPG acquisition did not include LiveRamp, a data onboarding company which has become a separate corporation.
The Publicis acquisition of Epsilon will strengthen their efforts as online client data becomes a core competency with ad agencies. Epsilon’s core business is people-based precision marketing. At the time of the acquisition, Epsilon had 9,000 employees, including 3,700 data scientists. 97% of net revenue came from the U.S. Epsilon also has 250 million privacy-protected consumer IDs. Epsilon focus is on media by integrating their data sets with Publicis to develop consumer IDs, audience segmentations, and more optimized and better targeted media buys for clients. With their digital management capabilities. Epsilon enables the agency to offer greater consumer information to help optimize their client’s business strategy. In addition, Publicis global accounts enable Epsilon to expand into other markets. In April, Publicis announced they were enlarging their relationship with Adobe
In 2018 Omnicom launched Omni, a people-based marketing and insights platform that personalizes consumers across creative, media, customer relationship management (CRM) and other areas. Omni enables clients to plan and buy a media schedule as well as maintain anonymized first-party customer information such as product purchases. The objective is to improve collaboration and produce neutral results fortified by the lone view of the consumer to help clients. Omni taps into several third-party consumer connected databases including Neustar, LiveRamp and Experian to name a few.
The use of data does have issues such as cookie cutter outputs. Pattisall says, “The consequence is a sea of digital sameness in which marketing and experiences provide the same benefits and advantages.” On the other hand, marketers want to do the opposite and stand out by requiring agencies to invest in intelligent creativity combining people and platforms.
Privacy can be another issue, Pattisall adds, “Nothing keeps a CEO up at night like the idea of a hack or breach. Clients must take steps to protect their customer’s data and privacy. Third-party providers like Live Ramp, Zeotap, The Trade Desk offer clean rooms that allow brands and their partners the ability to work with first party data with low risk to fidelity. Agencies are also building clean room and data identity solutions. These are good steps in the direction of privacy. But not leveraging their first party data is a bigger risk to clients. As Facebook, Google and Amazon build even higher walls, closed ecosystems firms must use their first party data as the basis for customer and prospect understanding in order to maintain relationships outside of the dictates of “Big Tech”.
Well-known media consultant Bill Harvey says, “It’s logical for all agency holding companies to become first class experts at big data, especially now that digital with its obvious direct marketing capabilities has become such a major part of media allocations. At the same time, the deprecation of third-party ID-matching solutions will cause advertisers to up the priority given to collecting the largest possible database of direct consumer relationships, even with people who don’t buy their brands yet. The agencies’ systems will be competing for management of those huge client databases, so they have built them just in time.”
Agencies embracing data comes at a time when many ad tech companies are using big data sets with aspirations of competing or replacing Nielsen in providing audience measurement to be used as the negotiating currency between agencies and programmers.
The days of Mad Men appear to be long gone.