Arun Kumar loves a good analogy. We’ve been talking for about 20 minutes and he’s already deployed three. Each one has worked, which suggests as well as being Interpublic Group’s global chief data & marketing technology officer, he’s got a flair for the creative stuff.
Right now, he’s asked me to imagine being a jeweller, whose consumers want diamonds. The sad reality with the diamond supply chain is that a lot come from conflict zones. Ethically speaking, we don’t want those diamonds, and if our consumers found out we used them, they’d reject our brand. Equally, diamonds aren’t going away.
“So what would you do?” Kumar asks. “You would reverse-engineer your supply chain and start owning that chain all the way down to the mine.” Swap the word ‘data’ for diamond, ‘agency network’ for jeweller and ‘clients’ for consumers, and we’re left with a rather neat analogy for the huge role Kumar says Acxiom Marketing Solutions will have in transforming IPG’s understanding and use of data.
“That is exactly what it is with Acxiom, in that it is the source of ethical diamonds to me,” he continues, “and in a world where Google and Facebook are the only ones who have mines, this is one of the few mines left which passes all regulatory tests and is actually quite conscious of how consumers feel about data.”
Much has been written about IPG’s US$2.3 billion acquisition of Acxiom last July, in a marketing and media landscape increasingly driven by data. But listening to Kumar, who has led on the project from the beginning and continues to oversee its integration, it seems the possibilities over time really could be game-changing, and timely, as the global conversation around data and privacy has exploded.
Large swathes of the industry still talk about scale in terms of billings and media buying, Kumar says, but IPG believes the key is having scale in data, and data-handling capabilities. That meant addressing two key questions.
“What is our understanding of consumers around the world, at the most granular, individual level that we can get?” he poses. “And second, in an environment where almost 60-70% of all the signals in a market stay within the Google, Facebook and Amazon walls, what can we get as signals outside that? It’s invariably first-party data that sits with clients.”
Marketers and agencies talk endlessly about wanting to understand their consumers, and Kumar believes achieving this increasingly relies on having access to good first-party data, which is where Acxiom comes in.
“I don’t want my understanding of consumers to be sitting inside walled gardens,” he states. “So if you look at it this way, as my volume of signals about consumers that I understand increases, that makes my media buying smarter. Which means marketers are happier because that means I might actually go to a client and say ‘you don’t need to spend all that money on me’. So when Acxiom became available, we said ‘this is brilliant’, because it does a lot of things for us.”
“A multi-year transformation”
With all the excitement around the deal at IPG, surely rapid implementation is the next step? Not so, Kumar says. Getting Acxiom’s integration right is critical, and he admits that is a multi-year effort. “It’s going to happen over three to five years. I think the full transformation will probably take even longer than that,” he estimates. “Because you’re not just transforming one company, you’re transforming many in the process of getting there.”
Kumar says Acxiom’s data smarts and technology go far beyond just media and marketing, and could ultimately end up powering IPG’s entire offering as a network. That’s a process that will take time and must be completed in careful stages without putting the cart before the horse.
“A large part of what we’ve been doing [post-acquisition] is just saying no [to clients],” says Kumar. “And that’s because there is a plan to get there, and we need to physically make certain things happen before the promise comes true. We will keep Acxiom as an independent entity within IPG, but at the same time we want to build the integration layers so that Acxiom is integrated with the right resources and people within other IPG agencies to be able to offer a solution.”
Regarding Asia, Kumar says the priority markets are China, where Acxiom already has a large footprint, and Japan. Australia is likely the next target, with the rest of Asia having to wait for now. “Quite honestly it’s a question of whether the market is in a position to benefit from having Acxiom,” he explains. “At the most basic level, maybe with data, but if the use case does not demand it, I don’t want to shove it down a market’s throat.”
The quick changes Kumar sees happening include unifying marketing and media stacks that historically “don’t talk to each other,” thus immediately reducing latency and improving match rates for clients. Another obvious area for Acxiom to get started, given its expertise in sensitive data, is IPG’s healthcare arm, which accounts for 24% of the business.
Longer-term, Kumar says IPG is having numerous conversations with clients who want a fully integrated offering—creative, media, marketing—powered by data, with some clients even going as far as offering to pilot programmes with the agency network.
“Some of the best conversations I’ve had are with clients who in many cases have educated me on what the possibilities are,” he admits. “Because they are able to see it from a very different perspective of ‘if you can do this, I know somebody else in my organisation who would benefit, and actually this is a use case’. So it may work better for them if we co-create.”
But changes are already happening, simply by having IPG and Acxiom people in the same room, as part of the same team. Although Acxiom had been powering IPG’s tech stack for some years before the purchase, Kumar says they are now, unsurprisingly, far more aligned.
“If you think about a data or technology company that sits outside your house, even if they’re really good partners to you, often times their priorities and roadmap don’t align with yours,” he explains, using another analogy. “So it leads to a lot of frustration because you both think you’re building a bridge, but then as you get closer you realise you’re pointed in two different directions.
“It’s really interesting to be in the room with different people and cultures, where the Acxiom people have a really rigorous approach to data, and my data and technology team comes from the Valley, which is used to a more agile approach. So when you take the best of those two worlds and put them in a room, you start to see magic.”
What of concerns about Acxiom’s existing business and potential conflicts with IPG? Kumar is unequivocal. “From an agency perspective, less than 1% of Acxiom’s global revenue comes from agencies, and of that half of it is us. During due diligence, this was one of the first things we checked. So we don’t see any impact from other agencies buying or not buying from Acxiom.
“Acxiom has its own clients, nothing’s changed there, and that’s the reason we’ve kept them as an independent entity within IPG. It is fundamentally a strong standalone business, even if there were no synergies. We never assumed any cost synergies, because there are no overlaps; they’re bringing in a capability none of us have.”
GDPR, Google & Facebook
One of those capabilities that is crucial in today’s environment is data management, in the era of GDPR and other privacy-related legislation coming in worldwide. Kumar remains relaxed about these new acronyms creating much buzz in adland, because in his view IPG has acquired in Acxiom the right business to handle these concerns.
Regulators are demanding more of advertisers, marketers and agencies in taking even greater care of personally identifiable information in the digital ecosystem. Amid the outcry and handwringing, Kumar is notable in that he is in favour of the changes.
“It is actually the best thing to happen if you’re one of those people who believes in that entire [digital] ecosystem,” he explains. “Because it means that people who truly understand how to manage permissions from customers are going to win, and who better than Acxiom, who have been dealing with really sensitive data for over 50 years, to help us understand how to deal with sensitive information on this side.”
The topic inevitably leads us to discuss Google and Facebook, particularly regarding data management. Kumar is not shy in his disdain for the two companies’ role as de facto spokespeople for the advertising industry, meaning advertisers aren’t having the conversations they need to with regulators.
“The reality is there’s a big assumption that this industry is about Google and Facebook. It’s not, and frankly, let’s look at what has really happened,” he bridles. “It’s Google and Facebook that have messed up with the data of users, it’s not advertisers or advertising agencies. So why should we all be bucketed in the same group? That’ll continue to happen if we don’t have a voice."
Advertisers don’t want to annoy consumers, Kumar continues. “I don’t think any client is sitting there and saying let’s just repeatedly bombard these suckers because we’ve nothing better to do.
“Whereas as Google and Facebook’s financial model is dependent on making sure you show multiple impressions to the same person, that’s how they make money. So why am I getting bucketed with that? I don’t want to be. I want an independent voice and I want to get out of this walled garden nonsense, where you [the walled garden] are going to have all this information about my consumers, it’s going to be locked in your ecosystem, you are going to screw up, lose that information, and then impose rules on me.”
For Kumar, the aims of agencies and advertisers are different to the platforms, and especially following the Acxiom acquisition, IPG and other holding companies need to have a strong voice in the debate.
What’s also clear is that IPG is still very much at the beginning of its journey with Acxiom, and the possibilities are myriad in Kumar’s eyes. An insight into just how much work is going on behind the scenes is Kumar’s startling admission that the group hasn’t even celebrated the deal yet.
“There are very few times in your career when you and a community of people you really enjoy working with get an opportunity to do something that is fundamentally transformational, for yourself, your company and your industry,” he says. “My feeling is somewhere down the line I’ll get the time to reflect. Now is the time to do. There’s a lot to do and we just want to get to it.”