The Acxiom data dilemma behind Omnicom’s market-making IPG acquisition

“It [Acxiom] has always been much stronger in the US compared to Europe in terms of the IDs available to them, so we couldn’t do enough with them,” said Billy, who is one of IPG’s clients. “And even then, we pushed it, not them.” [IPG].”

The unblemished view cuts through the noise surrounding IPG’s data business since Omnicom announced plans to acquire it and the rest of the group. Chatting is at the center of the so-called “Holdco of the Future”. But whether it lives up to the hype is another story entirely.

Acxiom, as it turns out, is anything but simple.

When IPG first announced its intention to buy Acxiom Marketing Services in July 2018, it was a huge gamble, especially since the $2.3 billion price tag was more than a quarter of the company’s market cap at the time ($7 billion to $8 billion).

Acxiom’s purchase was pitched as a strategic move to improve IPG’s capabilities in data-driven marketing and personalized advertising, and was therefore evangelized as a means of maintaining such practices even as laws such as the EU’s General Data Protection Regulations came into effect.

A year after its initial announcement, the IPG executive team the acquisition was instrumental in attracting new clientsincluding those from the automotive and financial technology sectors, into a holding company. At the time, Philippe Krakowsky – then CEO of IPG Mediabrands and proposed COO merged IPG and Omnicom — claimed to have brought “expertise and credibility” amid increased scrutiny over how advertisers use consumer data.

Investor concerns about Acxiom

However, the following year, after Google confirmed it would join Apple in ending the use of third-party cookies in its Chrome web browser, Wall Street investors still questioned the wisdom of such a purchase.

For example, wouldn’t other holding companies want to leave Acxiom now that it was under the management of one of their fiercest rivals? This fate affected other descendants of advertising technologies after taking over the investment of the holding company. Defenders of the deal insisted they had not, and further argued that they were “creating ways around” cookie restrictions for third-party browsers when dealing with investors.

However, this view was not universally held, and Digiday’s ad tech experts expressed concern that the company should be considered a first-party data asset. in addition Adstra’s ongoing legal action against the IPG duo Acxiom and Kinesso indicate shaky foundations for Acxiom’s claims to first-party data credentials.

Isn’t it still just third party data?

Former IPG insiders told Digiday that they were confused as to why executives there were advocating the purchase of (what many saw as) third-party data brokering when laws like GDPR were being implemented.

“If you were looking for the reasons why IPG was forced to sell as a distressed asset, it was because they failed to invest properly in data,” noted Nick Manning, a former senior media executive (he was the founder of Manning Gottlieb OMD) who now helps marketers analyze the complexities of media trading.

This sentiment was repeatedly echoed in conversations with Acxiom clients, IPG employees and rivals. Consensus? Not enough emphasis was placed on the quality or usability of the data on which these businesses were built. Some views veered into cynicism, suggesting that these businesses were little more than a game of hoarding data — quality be damned — and selling it to advertisers hungry for an audience on the open web.

Arielle Garcia, director of intelligence at CheckMyAds and former head of privacy at IPG’s UM, is dismayed by the way Acxiom has been pitched as a core element of the proposed IPG-Omnicom merger, especially to Wall Street investors. “I don’t see how acquiring a third-party data broker makes you the owner of the first-party data,” she added.

Meanwhile, Rob Webster, formerly an executive at GroupM who now runs an AI consultancy called TAU Marketing Solutions, told Digiday that data classification can be (somewhat) subjective, but noted that a cautious approach is always needed.

“A data broker can be considered first party data if you squint,” he remarked. “What you’re doing is collecting a lot of data from advertisers and publishers, which is first-party data for them.”

IPG maintained Acxiom’s status as a “leader in first-party data management” and added that its data is “ethically sourced,” when Digiday provided such views to a company spokesperson in an email exchange.

The statement continued: “This combination of capabilities is exceptional and has not been challenged before, so the recent speculation about the asset clearly reflects heightened concerns from our competitors.”

Elsewhere, Webster went on to highlight the strategic importance of successfully integrating Acxiom into IPG’s proposed integration into Omnicom if they are to actually realize the $13 billion vision that its executives pitched to Wall Street in early December.

He noted that Publicis Groupe’s Epsilon is setting the pace for Madison Avenue’s data-driven advertising offerings. “It’s all about match rate [between advertisers’ desired audience and a media owners’ registered users]… how Epsilon gets these great match rates is still a mystery, but Acxiom is not as good as what Epsilon has become,” added Webster.

Platitudes to Wall Street investors aside, many sources Digiday consulted in the weeks since the move was first proposed did not discuss much about how Omnicom will integrate Acxiom into its client offerings.

According to separate Digiday sources who recently spoke with team members at Omnicom/IPG, executives in key areas of influence on both sides of the proposed deal were not consulted before its announcement.

The sources, who requested anonymity in exchange for candour, said many executives on both sides of the exchange would likely be mulling over how to reverse-engineer solutions to the strategic vision formulated above their heads.

“If you talk to some of the ‘Omnicoms,’ I don’t think they really realize what they’re getting with Acxiom,” one source added. “I think a lot of them think they’re getting some kind of nifty set of data that’s beyond their ability to provide… I don’t think they realize that they’re just buying a data exchange from a third party, or that’s what they’ve done. got.”

Separate sources consulted by Digiday observed how Acxiom’s integration into the Omnicom group is likely to focus on monetization – “there was no real ‘retailer mentality’ [IPG],” according to one source — with mid-to-senior managers remaining after the inevitable efficiency drive is likely to be tasked with addressing this in mid-to-late 2025.

“Omnicom didn’t do as good a job as Publicis.” [at selling Epsilon to clients]but they still did a better job than IPG,” commented one former Omnicom source, who declined to be named, adding that the France-based holding company and their former employer are currently the top two in the market.

“I’m sure there are many different themes for this acquisition, but I’m sure one of them is, ‘We can take what they have [Acxiom] and sell it much better.”