As Publicis snaps up identity-based platform Lotame, the holdco data wars intensify

The acquisition will bolster Publicis’s already impressive identity-based data offering: Lotame brings with it a database of 1.6 billion user profiles. Add that to the 2.3 billion profiles Publicis already ‘sees’ and it claims a total reach of 91% of all internet-connected adults globally (the exact number remains to be seen after data de-duplication).

An “end-to-end data marketplace” with almost two decades in the game, Lotame also boasts over 100 data sources and relationships with over 4,000 brands and publishers. It will continue to operate under its own name, under the wider aegis of Publicis Epsilon. Lotame will have a particular focus on the APAC and EMEA regions – this follows a similar acquisition, focused on the LATAM region, of Argentinian data shop Retargetly back in 2022.

No financial details have been shared, but a Publicis spokesperson told The Drum that this deal caps out a six-month acquisition spree (also including influencer shops Influential and BR and commerce shop Mars United) to the value of $1.5bn.

ID or AI?

The acquisition further cements Publicis’s all-in strategy on identity-based big data – an approach to marketing targeting and personalization that relies on amassing first-party data sources to build profiles of real people.

In the macrodrama of the holding company world, competition for identity-based supremacy is nothing new. When Publicis acquired Epsilon back in 2019, it did so for close to $4.5bn. That was not long after rival IPG swooped in for another player in the space, Acxiom, for $2bn. Since then, Acxiom’s user profile coverage has (it says) expanded to 2.6 billion globally – a number that Publicis will leapfrog by bringing together Epsilon and Lotame.

But that leaderboard will shift again later this year when Omnicom completes its merger with IPG: the former already touts its own offering, Omni, as “the most comprehensive data set in the industry”; getting its hands on Acxiom too will bolster that claim. Looked at one way, an arms race between three of advertising’s four biggest holding companies is very much on.

For its part, WPP, the embattled fourth of the Big Four holding companies, has been singing a slightly different tune. While it’s betting big ($300m) on its AI-powered platform WPP Open, just last week the chief executive of WPP’s flagship media business GroupM, Brian Lesser, hinted that WPP doesn’t see the value in joining that arms race, touting “a shift from ID to AI.”

“We believe that data connectivity is more important than simply owning a database,” Lesser told investors on an earnings call. “No matter how many traditional IDs you own, it will never be enough.”

Lesser went on to say that “no single database can manage [the] scale and complexity” of GroupM’s own approach of working with thousands of data partners worldwide: “The future is about connecting disparate data sets to extract insights, create predictive models and drive performance.”

When The Drum sat down with Scott Hagedorn, chief solutions architect for the Groupe, his rejection of Lesser’s approach was wholesale. “The reason we’re so persistent on identity being the denominator of all marketing is that it drives your targeting; it drives your precision with messaging; and, more importantly, it drives your measurement. On a global basis now, we can reconcile and measure back to identity. We can look at exposure and media and marketing delivery and then look at how it lifts the client’s business from a growth perspective. This [acquisition] completes our footprint of being able to do that around the world.”

“Without an identity footprint, marketers can’t really do modern marketing… For us, connected identity is our foundation; our CoreAI capability is essentially an application layer on top of the data. Being able to do that in every market is a huge deal.”

And Hagedorn did not mince his words on WPP’s alternative approach, based on federating data from all those thousands of suppliers: “The problem is, when you become dependent on syndicating identity, you’re going to get charged every time you use that identity… That’s why we’ve been able to make identity and AI work for our clients: because we’ve made investments to own it, and not rent it.”

‘Connect or die’

In his briefing today, Publicis’s Sadoun summed up an approach to AI and data that operates under a single rubric: “connect or die.” That means connecting data sources, connecting the organization’s 25,000 engineers under unified approaches to data and AI, and connecting Publicis’s customers more quickly and cleanly with their end consumers.

Under that rubric, the group is keen to show the interconnectivity of the suite of services offered by its digital consulting arm, Sapient, including internal AI tool Marcel, generative AI suite Bodhi and software development tool Slingshot.

For his part, Hagedorn says the exciting part starts now: “building applications on top of connected identity… My goal is to build an infinite number of planning systems for clients, to drive growth based on their specific needs.” The tech, he says, is finally there to quickly and efficiently spin up such planning systems on pretty much any brand’s actual customers; gone are the days of lengthy design and development cycles that result in dashboards that will be obsolete by the time they deploy. “The way we’ve engineered what we’re doing now, with this really solid data foundation, is that I can go through the life cycle of building something in two days.”

And the beauty, Hagedorn says, of the present data environment is that integrating Lotame post-acquisition can be just as quick. Under the ‘clean room’ paradigm, no lengthy integration process is necessary: “We’ll be there in a matter of months.”