Arun Kumar, chief data and marketing technology officer at IPG Mediabrands, will play a central role in integrating Acxiom Marketing Solutions (AMS) into the holding company.
The $2.3 billion acquisition, announced last week, gives IPG 1,600 data scientists, 200 product and technology specialists and first-party data on 2.2 billion global consumers. With AMS, IPG also significantly expands its first-party data capabilities, which CEO Michael Roth told investors it couldn’t offer without outside help.
“AMS, for us, is a big bet on the future,” Kumar said. “This changes the very character and nature of our holding company.”
AMS allows IPG to manage first-party data while protecting privacy, which is crucial in today’s regulatory environment, Kumar said.
“I don’t think you can be a holding company and not have the capability to work with data in an ethical fashion,” he said. “If we’re going to be held accountable for how data is being sourced and used, it makes sense to own that process rather than rely on third parties.”
AMS will also put IPG’s AMP platform, which already leverages Acxiom’s ID to build and target audiences for clients, “on steroids,” Kumar said.
AMS will operate as a standalone entity under IPG so it can continue working with current clients, many of which are IPG competitors. Owning AMS puts IPG in the data-selling business and changes its philosophy on renting versus owning data.
“We think we can still continue to be agnostic and have our own data assets,” Kumar said.
He spoke with AdExchanger.
AdExchanger: What’s your vision for AMS?
ARUN KUMAR: Data is going to be at the heart of all marketing. It has shown application in media, but we think the opportunity stretches well beyond that. AMS will give us capabilities to scale [our data stack] across the entire holding company as opposed to just Mediabrands.
What capabilities does AMS give you that you didn’t have before?
It helps us manage first-party data in a privacy-compliant fashion. We think that’s going to be fundamental to how a holding company structures its offering. Getting disciplines to work together on one client is going to depend on how data flows within the holding company and stays actionable.
Having more intelligence about the consumer is going to benefit businesses activating against audiences. Data-driven strategies have to be consistent. We can no longer [source data] well in the US and not in other markets.
Michael Roth said publicly that IPG was turning clients away because it didn’t have the data capabilities it needed. Could you not work with first-party data before?
We could always work with first-party data, but not at the scale we would like.
The landscape today is very different from a year and a half ago. How you source, manage and leverage data has changed. You have different regulations in different geographies. We didn’t feel we could deal with first-party data at the scale at which Acxiom does.
About a year and a half ago we announced a partnership with Acxiom. They’ve helped us scale our data stack in and outside the US. We have been relying on them to a large extent.
How much does this acquisition have to do with GDPR?
The future of marketing is data-driven, but there is a fair amount of concern around how data is used to market. One is an opportunity, the other is a challenge, and both of them exist at the same time.
We think more geographies will have regulations that resemble GDPR. If you want to take advantage in that environment, you need the ability to source, manage and leverage data ethically. When you’re accountable, it makes more sense to actually have those capabilities with you.
Does owning AMS change your objectivity by putting you into the data-selling business?
That’s one of the reasons why Acxiom is going to be a standalone business. Our philosophy around giving clients their choice of platforms and data services has not changed. We took a stance that Acxiom was the best provider of data assets and services. However, if a client chooses to work with A, B or C provider, we’re going to do that.
How will owning AMS data evolve your AMP platform?
The AMP stack will have an accelerated road map in various markets. It’s a question of joint product planning and launching new products on the back of what they and we have.
The opportunity is to take AMP outside the US where you may not have the same third-party data ecosystem. When first-party data becomes even more critical, Acxiom’s capabilities can be hugely beneficial.
Are you using first-party data in AMP now?
We’ve used Acxiom and other providers to do that in the past. You can always bring first-party in an anonymized fashion and built segments off of it, but the ability to manage PII is a much different conversation. This takes it to a totally different level and scale.
What joint products are you planning with AMS?
One of our objectives is to democratize data across the organization. There are assets within AMS that aggregate data from different sources. Connecting those into different activation and analytics platforms is going to be powerful.
The race for the future is not just about the scale of data, but how widespread and how well distributed it is. And are your people trained to use it.
Are your people trained to use it, or will you need training from AMS?
There will definitely be initiatives around training linked to products. We already have a pretty robust training regimen within Mediabrands. I expect that will be a big part of our plans to scale these capabilities within IPG.
What’s the biggest challenge you expect to face?
Integration is always hard, but I think the elements that usually trip up acquisitions do not exist in this case. We’re not buying this asset from a cost-synergy point of view. We’re not trying to strip anything out. We’re trying to build complementarities and scale.
These are two very big organizations. This is a long-term, strategic play. There’s a certain direction in which we are headed, and we’re not in any rush to mold AMS into anything.
Where would you like to be a year from now?
I hope for a headline in AdExchanger which says, “IPG Was Right.”
I’m expecting indications that our strategy is starting to pay dividends. I’m hopeful that in a year the industry is able to see how IPG operates differently because of this acquisition.
Will you buy LiveRamp?
Nice try, but I can’t answer that.
This interview has been edited and condensed.