Monday, April 15, 2019

Q&A: Publicis Groupe CEO Arthur Sadoun on Epsilon acquisition | Advertising Age

Publicis Groupe’s $4.4 billion acquisition of Epsilon, one of the biggest agency deals in history, has left company CEO and Chairman Arthur Sadoun running on fumes.

“I look 15 years older," he says. A year ago, in a gag video for his staff, Sadoun disguised himself as a much older man – a joke about the stresses of his job. Now, he says, "if I had to redo my theme from last year, I wouldn’t need any makeup."

Despite the negotiations—Sadoun says he flew from Paris to the U.S. every week for three months straight—the 47-year-old chief executive sounds as if he still has a bounce to his step, perhaps because of what Epsilon brings to the table, but also because the holding company beat out formidable players such as Goldman Sachs for Epsilon.

Generally speaking, the Epsilon deal allows Publicis to take a shortcut to where digital advertising is already heading. Between regulation, a fragmented digital landscape that includes email, websites, apps, connected everything, digital audio, voice, Apple Safari’s ITP update, among many, many other verticals, companies more than ever need first party data, not only to reach consumers with so-called personalized ads, but to also gain a better understanding of who their consumers are.

Without first party data segments, an agency like Publicis could be set up for failure, especially as rivals such as Interpublic Group of Cos. are already steps ahead following its $2.3 billion acquisition of Acxiom Marketing Solutions last July. Epsilon, for its part, has a treasure trove of first party data, as it sends more than 71 billion personalized emails annually and has over 250 million U.S. consumers in its database and 7,000 different attributes.

On Sunday, Sadoun spoke with Ad Age about what the deal means, its backup plan had it lost the acquisition and how Epsilon’s data will be applied to creativity. This interview has been edited for brevity and clarity.  

Is it true that Publicis previously had little to no first party data?
We have a lot of media data and a third party data model that we have developed, but it is true, in comparison of what Epsilon brings, what we had was way smaller. We are fast-forwarding because it took years and decades to build what Epsilon has today. It is a way of leapfrogging the market and being ahead of competition in a way that we were not doing. Also, and this is very important, don’t forget that we are bringing on board 3,700 data scientists and 2,000 engineers in India, so we are bringing a lot of people with data and tech backgrounds.

Publicis says it wants to integrate Epsilon “to its core.” What does that mean?
When I say "Epsilon will be at the core," it means we will integrate it with all of our creative agencies. We want to be at the core of our clients' transformation and we want to link data, dynamic creativity and technology to make sure our clients can deliver personalized experiences at scale. The acquisition of Epsilon is only accelerating that.

How so?
If you want to bring personalized experiences at scale, you must have great creative work, which is the core of our business, our differentiator and where we bring value. But now it’s evolved. You must now have dynamic creativity, which means you can personalize and contextualize our work.

Sources at Publicis tell me that the Groupe spends more than $1 million a month renting data. What does that mean now that you’re acquiring Epsilon?
It’s true that we have had many partnerships in the past and that we will now be able to reduce them to use what we have in Epsilon. That is something unique and it’s something we don’t have to build anymore.

Some people within Publicis told me that if the deal with Epsilon didn’t happen, that it would try and acquire AdRoll. Is that true?
No. What is true is we have been looking at a lot of possibilities, so not one in particular. We have been looking at Epsilon for the last year; it is not something we discovered at the last second. We had more than 50 meetings with them.

How long will it take to integrate Epsilon’s tech with Publicis?
The good news is when you look at the way they are, they can plug-and-play into our organization immediately. The fit is immediate. You just plug-and-play and boom.


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