“Bringing those three pieces together gives us an integrated performance business—the unit that services the lead agencies of UM, Initiative and Mediahub, but is connected to the data intake layer,” Martin said.
As other holding companies like Dentsu are folding agency brands into single business units like Dentsu Creative, IPG Mediabrands still wants each of its agencies differentiated. When Adweek asked if using the same technology will make agency offerings too similar, Martin said the decision simplifies complex processes like data analysis.
“We want to clean all of that [complexity] out of that system so that everything that can and should be common to each agency is, and everything that shouldn’t be common and is unique, is unique,” he said.
Similarities to other holding company structures
Over the past few years, IPG’s holding company competitors leaned on similar strategies to draw more value out of their existing data and technology subsidiaries. In April 2021, WPP formed data company Choreograph by tapping experts inside Wunderman Thompson and GroupM. Then last May, it launched the GroupM Nexus digital media business unit that activates media on behalf of GroupM agencies.
GroupM Nexus employees aren’t client-facing. Rather, they regard GroupM media agencies as their clients, GroupM Nexus CEO Nicolas Bidon said at the time of the announcement. Last week, Mediabrands leaders told Adweek the same thing.
Before the consolidation, the three business units worked directly with some clients, which they’ll continue to service. The data layer will remain bespoke, supporting the three media agencies Mediabrands prefers remain front and center.
“The Kinesso move is kind of IPG playing fast follower to what some of the other holding companies have done with their tech layer and their tech strategy,” Jay Pattisall, principal analyst at Forrester Research, told Adweek.
Consolidation like this is commonplace for holding companies with sprawling business investments. Until recently, restructuring predominantly affected agency brands and employees. More recently, though, changes reach the technology businesses that support those agencies.
Shifting media mixes explain why.
To serve media across more digital platforms and channels like retail media, marketers look to digital activation specialists. So, specialty shops with expertise in practices like performance media are a threat to the holding companies. Despite their historical expertise in traditional media, holding companies position themselves as one-stop shops for clients wanting to avoid juggling relationships with several agency partners.
By offering their media agencies access to a bespoke team of digital specialists sitting within Kinesso, Choreograph, GroupM Nexus or Omnicom’s Annalect, holding companies can regain an edge on smaller expert-run shops.