IPG CEO Michael Roth Sees Data Analytics And Transparency As Key Differentiators

michael-rothIPG plans to boost investments in data analytics and coordinate its database across all its agencies, CEO Michael Roth said Friday during the holding company’s Q3 earnings call. Read the release.

“That will be a key focus for us in 2017 – to make sure all the agencies at IPG have a consistent offering in utilizing the unique capabilities we have in [global media management unit] Mediabrands,” Roth said.

Part of that initiative will include the development or acquisition of a data management platform.

“Frankly, if we don’t have it organically and we don’t have those capabilities internally, we’ll look to add on,” Roth said, noting Mediabrands’ 2015 acquisitions of an SEO agency and a mobile agency.

The need to improve data capabilities is a key component in remaining competitive.

“[Data analytics is] an important growth area for us,” Roth said. “Clients are looking for it, and that’s where we see lots of competitors try to get inroads.”

Those competitors include other agency holding companies, such as WPP, which has invested heavily in data, and consultancies, many of which already provide systems integration capabilities to IPG clients and want to capitalize on the opportunity to also offer creative services.

Roth said IPG’s “open architecture” model – which aligns Mediabrands with all IPG agencies – is “a very compelling argument against them trying to get into our business.”

He also seemed slightly bemused by the consultancies’ attempt to compete around creative: “[With] the firepower we can bring in on creative work, there’s no way these new competitors can compete with that. And the results show that.”

While IPG seeks to differentiate with better data capabilities, it already has an advantage with its transparency policy. Roth emphasized IPG doesn’t buy digital media as a principal.

Roth wouldn’t say specifically if IPG’s reputation around transparency and its media agnosticism were the reasons it won business, but he claimed it made a difference with clients.

Furthermore, press coverage around transparency issues make it a continuing issue with clients, which in turn enhances IPG’s opportunity to expand its media offerings.

The holding company’s Q3 earnings were strong – total revenue reached $1.92 billion, a 3% year-over-year increase, while its organic revenue grew 4.3% sequentially.

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