By Marty Swant • December 10, 2024 •
Ivy Liu
Omnicom’s plan to acquire Interpublic Group is a long way from being finalized. However, the combined company could help the holding companies make — and benefit from — larger AI investments.
On a Monday call with investors about the deal, executives from both companies mentioned ways the merged company could benefit from combining resources. Omnicom CEO John Wren said businesses need to continue investments to “stay on the cutting edge” adding both clients – and agency employees – will benefit from investing more into AI efforts.
“If Interpublic was three quarters of our size, yesterday I had $1 to invest in those efforts, now I have $1.67 to invest in those efforts,” Wren said. “It should make me more agile, it should make me take great investment risks in testing new technologies and platforms as they come along — all to benefit from better information, more accurate information, so our real knowledge workers and whatever craft they lie in are going to have the best tools to service those clients.”
The means for more AI spending could come from money saved. The companies — which estimate having at least $750 million in synergies to be saved — plan to explore some of it being reinvested into AI investments, future acquisitions or internal development.
On a call with investors, IPG CEO Philippe Krakowsky said the merger will help Omnicom invest and innovate faster and let tech investments pay out across a bigger footprint. He also joked about it’s nice being the big dog for once: “Traveling in packs helps,” he said. (Earlier this year, IPG had planned to invest at least $80 million into AI in 2024.)
One part of the plan is combining Omnicom’s Omni and IPG’s Interact behavior tools, IPG’s Acxiom identity layer and Omnicom’s Flywheel for transactions.
Others say Omnicom could integrate AI into IPG’s creative agencies. Axciom’s data combined with existing assets like the Omni platform could enhance Omnicom’s creative offerings by leveraging AI to improve media buying efficiency and create personalized, data-driven ads. That could depend on where Axciom is placed within the merged company, noted one former media agency exec. Will it sit within media as where Publicis Groupe placed Epsilon, or will it be within a diversified services division that’s separate from media and creative?
“This would also provide an increased understanding of consumer behavior and preference, allowing for more precise strategies to resonate with target audiences,” said Gartner analyst Nicole Greene. “The key question remains, will the roster of agencies, who often maintain some independence, have access to the AI capabilities necessary to leverage this data. Will they merge the data and tech capabilities to drive efficiency and effectiveness for clients?”
Assets like Axciom and Intelligence Node could power AI creative and commerce
One puzzle piece Omnicom gains is Acxiom, an identity layer IPG acquired for $2.3 billion in 2018. Along with boosting Omnicom’s adtech stack, Acxiom could help the holding company’s overall AI strategy. That could help compete with Epsilon, which Publicis Groupe acquired in 2019 for nearly twice the price of Axciom. Epsilon has powered Publicis Groupe’s adtech stack, but it was also named as a key component to Public Groupe’s Core AI platform that debuted earlier this year.
Experts note it could take a lot of work on the back-end to fully benefit from Acxiom. Jeremy Fain, Co-Founder and CEO of Cognitiv, also mentioned Acxiom still shares some of the same DNA as LiveRamp, which he noted is still a leading player in alternative IDs.
“They’re toying with this idea that they can become more than a service company and a service organization, but that creates a different business model which I think they’ve all struggled with,” said Fain. “That’s the big question here: Is this merger going to help them finally transform into a technology and innovation center?”
Some companies that partner with holding companies also see the proposed merger as potentially beneficial. During Zeta Global’s data summit on Monday, Zeta Global CEO and Co-founder David Steinberg said he thinks the merger won’t have a short-term impact and could be a “major positive” longer term. He also noted that Zeta, a marketing tech company, already partners with five of the eight largest holding companies.
“In the long run, we see this as a massive positive,” Steinberg said on stage during a Q&A session. “We’re already plugged into both platforms. We think we’re going to see that these two companies will come together in a unique way. They’ve both got incredible management teams with great assets and great people. It’s going to be a long integration. This is not something that’s going to happen overnight. We’ll probably end up supporting it at some point from some vantage point.”
Omnicom could also benefit from other parts of IPG including Intelligence Node, an AI-powered commerce platform acquired last week. (Last year, Omnicom acquired the AI commerce platform Flywheel for around $835 million.) Brian Mandelbaum, CEO of Attain, a commerce data platform, said AI could help Omnicom measure purchase-based data to understand which marketing efforts are effective.
“The hottest data set for all marketers and advertisers is purchase-based data,” Mandelbaum said. “It is the holy grail of the final mile of all your marketing efforts. Did something happen or not? Did they purchase? Whether a merger happens or not, that is going to be the number one pursuit of all marketers and their partner agencies to get their hands on.”
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