CES Briefing: A Q&A with Stagwell’s Mark Penn & the streaming ad data disconnect

Artificial intelligence is one of the backgrounds of this year’s consumer electronics fair. But the Omnicom-Interpublic Group merger is another, especially for advertisers and participating agencies like Stagwell, which bills itself as a challenger to established agency holding companies.

On Tuesday, Digiday sat down with Stagwell CEO and Chairman Mark Penn to hear how the Omnicom-IPG merger is shaping his company’s conversations with clients, what Stagwell is up to with its own recent M&A activity, and the potential TikTok ban and the era of AI agents. means for advertisers.

The transcript has been edited for length and clarity.

Omnicom-IPG, I imagine clients bring this up in the meetings you hold during CES, in terms of asking, “What’s up with Stagwell?”

Well, look, I think to the extent that you’re looking at the contrast between the challenger network that we’ve built here at Stagwell and the networks that have gotten almost too big and are going to get even bigger, we’re looking at the contrast between the monsters — which may be a good fit for some clients — and the nimble, digital network we’re building. And we’re still growing and expanding. So I think the merger in general makes their clients a bit uneasy. And I think it will probably be beneficial for us. It also means that eventually many courses used to have two slots; now there is one.

Are you already reaching out to any of their clients?

It’s a bit early. People just started going back to work. I think we’ve seen more WPP vulnerabilities in the last few months. And so we have seen other clients come to us from them all along. But I don’t know what will happen to them.

Again, people are looking at monsters and are not sure if they can get it as a modern, personalized and agile service. This means that the monster was a plus to a certain level in the industry. Then, beyond a certain level, I think it becomes a weakness.

One of the most advantageous parts of being a monster seems to be that you have these massive media budgets at your disposal, especially with principle-based buying and pre-negotiated deals at the agency level. So is that something you have to respond to in that area?

We are a bit performance oriented. There tend to be more media on site as opposed to the media that can buy the biggest ones. However, we continue to expand our media traffic.

You’ve also been getting bigger in general. You’ve made a number of acquisitions over the past few months. Smaller acquisitions overall, but there were quite a few. What are you mounting here?

We are really putting together a network of challengers. We are spreading our geographic wings and strengthening our digital capabilities. You look at some of the more recent acquisitions; Create was the latest. So we expanded significantly into the Middle East and acquired Consulum and Create. So we got a combination of government services and digital transformation services.

What is the significance of the Middle East and North Africa for Stagwell?

It is a huge growth market. We need to complete the global network so that larger clients can provide us not only the US or Europe, but the whole world.

I spoke with a chief commercial officer at a major media company who said that a lot of the meetings they have with agency holding companies during CES are about data, agency holding companies trying to understand how they need to evolve their data operations. GroupM announced today that it wants move from a focus on a single, owned and operated data set to a more federated model. Are you making any changes to data access at Stagwell?

We have a lot of data that we’ve generated that we haven’t used. First, we create an ID graph in the US, and then that ID graph is augmented with the data that we have, the location data that we have from The People platform and from our survey companies that generate huge amounts of data. We now do more than 50,000 interviews in 15 countries a week across entertainment, media and more.

So that would be your own identifier, your own backbone ID?

Well, the spine under it will be one of the merits [reporting] companies.

TikTok. We need to talk about it. What’s the conversation you’re having with clients this week about TikTok?

We just mean business as usual.

Al. Where are you all in terms of your experimentation with the various large language models and applying them to your practice?

We are investing a lot, especially in what we call agent AI, which are the agents or representatives of brands and how they will interact with their customers. Generative AI is part of our Prophet products, which are our communication products. And then there are other forms of artificial intelligence that we use to simplify, say, database processing, test video creation, target group analysis.

I feel like everyone I’ve talked to when I’ve asked what these AI agents mean for advertisers, the answer is that it’s still too early and too new to know. But do you seem to be a little further along?

You look at our network of codes and theories, you look at left field labs. Code and Theory was at the forefront of creating pages for managing information content, and that is communication with consumers. And Left Field Labs has very deep AI technology indeed. So I think we’re in a better position because about a third of the company is digital transformation.

Unconnected TV

My New Year’s resolution is to never write about the issue of managing streaming ad frequency again.

I’m just kidding, if only because it seems like the problem with the same ad being shown to someone may never go away. But it could. And the solution is seemingly simple.

“It connects data,” said Lisa Giacosa, chief investment officer at Publicis Groupe’s Spark Foundry, in a session I moderated as part of the OpenAP Summit Audience on Tuesday.

Data linking is not only a way to solve the problem of frequency management, but also to measure incrementality, which has been a big focus among advertisers in the last year.

Large. So what is it? Not all streaming ad vendors allow their data to be linked. The idea is that this audience data is a critical differentiator, and making it available runs the risk that audience data will be brokered from the publishers that provide it, allowing advertisers to find valued members of one publisher’s audience on cheaper real estate.

For example, streaming services that attach content-related signals to display ads have been an obstacle. However, conveying these signals can help ad buyers value the source of an impression, rather than overlooking relevant content in the name of cheap reach.

“Cheap inventory is not always the answer. This is a race to the bottom because this type of engagement is not achieving many of our goals,” Giacosa said.

According to Jeff Collins, president of ad sales, marketing and brand partnerships at Fox, who joined Giacosa on stage, Fox is one of the streaming ad vendors trying to convey more contextual signals to the buy side.

“In fact, we’re now working with a number of third parties to do this so that we can make our contextual signals much more transparent to our partners. That’s a priority for us,” Collins said.

Another complicating factor is that companies may use different technology providers and measurement firms, making it difficult to connect the dots.

“Excessive frequency happens, especially if you combine different partners that don’t use the same data,” Giacosa said.

“As a publisher, we have to be quite agnostic and be able to work across multiple agencies, across multiple metrics and across multiple technology partners. It’s a lot of work. But at the end of the day, it’s worth it,” Collins said.