When it comes to data, IPG CEO Michael Roth has said in the past: “Why buy it when you can rent it?”
But that thinking changed last year when Acxiom went up for sale.
When IPG bought Acxiom, it was able to build new offerings around first-party data management. In October IPG launched Kinesso, a data and analytics unit that will create addressable media products built on Acxiom’s data and expertise.
“It’s hard to do those things when you’re renting capabilities,” Roth said.
While some consider the deal a privacy risk, Roth sees Acxiom’s 1,600 data scientists as an asset to guide clients through quickly changing privacy regulations.
IPG also helps clients navigate an evolving television landscape in which a raft of new data-driven and streaming products are entering the market.
Roth spoke to AdExchanger at CES in Las Vegas, Nevada.
AdExchanger: Why do you come to CES?
MICHAEL ROTH: It’s an opportunity for me to meet our new talent and clients at the same time, and some of our media partners to get a lay of what’s happening in our industry.
And there’s a personal reason: I’m a geek and I like to see what new devices I can buy. I like all of the new gadgets in terms of connected home, electric vehicles and wearables.
How’s the Acxiom integration going?
It’s been one year and we’re pretty much fully integrated. That was our goal. In virtually every pitch or big client meeting, we include Acxiom or Kinesso.
There’s a lot of confusion around what you bought and whether Acxiom has first-party data. Can you clarify that?
Acxiom’s core business is managing first-party data. That’s a core competency that very few companies have. That’s a separate business from Infobase, where they put together third-party data, which we can plug into our programmatic buying.
Why did IPG need to buy Acxiom?
There’s a big difference between renting and owning. First-party data management is so critical to major corporations that as a business, it was a good investment for us. Acxiom’s client base includes 50 of the top 100 companies in the United States. Those are pretty good clients to have access to.
We always had Acxiom on our wish list. It was a pretty big transaction. But the more we looked under the hood, the more we liked what we saw, from a cultural point of view, the capabilities and revenue synergies.
IPG has consistently outperformed its competitors for the past few years. What are you actually doing differently?
It’s our talent. Our diversity programs have helped significantly.
We haven’t commingled our brands. We’ve used open architecture as our go-to-market strategy. We can put any of our brands together with all of our other disciplines to meet the needs of our clients. Each of our brands have different go-to-market strategies. Why put them together when you can have different talent and strategies?
Our competitors are going through what we went through years ago [financially]. They’re rationalizing the business, getting out of businesses they don’t want to be in or are not strategic. We’re still getting rid of smaller, nonproductive businesses, but the heavy lifting we went through years ago. That puts us at an advantage, certainly from the street’s perspective.
Why does cross-agency collaboration work at IPG when it fails at other holding companies?
We started 14 years ago, and it’s all we talk about. We compensate based on collaboration. We view it on a client basis. It’s up to us to make sure clients aren’t involved in that. Internal silos are our problem, not theirs.
How is IPG dealing with audience fragmentation on TV?
It’s an opportunity. Our role is to help clients navigate that. Mediabrands people are meeting with the new offerings, whether it be Peacock, Verizon Media or Xandr. We have to have a good understanding of what they can do to advise clients where to allocate their media dollars.
A lot of networks are launching SVOD services. Where can advertisers find those audiences?
Someone has to pay for this stuff. They’ll find the audiences in different ways. We have social media, we have digital, we have experiential and radio. The question is: How much does it cost and how effective is it?
How is IPG adapting to new ways clients want to work with agencies?
We’ll work with clients any way they want. There are certain things clients should in-house. In the early days of social media, we managed hundreds of platforms. Clients have taken that in house. They look to us to provide expertise and specialization when they need it. That’s fine.
We help clients set up some programmatic [in house], but they need us to guide them. They need us to provide relationships with media owners and to make sure they’re kept current.
The pitch environment has been crazy for agencies the past few years. Will that continue?
It’s always going to be crazy. Right now, we see more opportunities than risks in terms of existing clients. I like to keep it that way, but you never know. Sometimes clients just put it up to see what’s out there. We try getting in front of that and have clients extend instead of review. But there will always be opportunities and risks associated with that.
For ’19, absent client losses we’re cycling through, we were net new business positive.
How disruptive is the constant pitch cycle to your agencies?
It costs a lot of money. We’re very selective. There are a number of pitches that we’re not going to participate in because the terms are not consistent with what we think they should be.
How do you push back on unfair demands in pitches?
We don’t participate. When you make it to the finals and get into pricing, you either accept it or you don’t. We’re not a bank.
Are agencies facing a talent crisis?
The Googles and Facebooks of the world, particularly in New York, are expanding significantly. Our people are at risk. But they’re not necessarily high-level people.
We’ve experienced boomerangs – people leave and they realize it’s not all it’s cracked up to be. We work on clients they relate to. At some of these companies they’re just put in a cubicle and they're working on coding. They’re not part of the entire picture, so they get disillusioned.
Philippe Krakowsky [COO, IPG] just got a big promotion. Is this part of your succession plan?
We’ve always had a succession plan. It bodes well if you can look internally. Philippe has been working closely with me since I came to the company. He’s well positioned for that. But we have other candidates.
We emphasize succession planning at all levels of IPG, not just for me. Every year I do a talent review with our board. That’s the way a company is supposed to operate.
Compared to competitors, our succession plans are pretty clear.
This interview has been edited and condensed.