Omnicom’s IPG Acquisition Can Rival Publicis’ Data and AI Supremacy, But It Won’t Be Without Challenges

Omnicom’s reported $14 billion blockbuster acquisition of IPG has the potential to rival Publicis Groupe‘s position as a center for tech and innovation excellence, thanks to the potential interplay of the new Omnicom entity’s data, commerce, and AI tech capabilities.

But, while having separate pieces of the puzzle will be helpful, merging them successfully is more complex. And the agency-holding company structure has been under pressure for some time, with more nimble competitors ready to snap up ad spend.

“Omnicom’s merger with IPG signals to competitors … particularly Publicis and WPP … that OMC is consolidating to dominate in scale, AI capabilities, and service integration,” said Tom Triscari, senior advisor, Landmark Ventures.

Both Omnicom CEO John Wren and IPG CEO Philippe Krakowsky pointed out that their combined resources will boost their technology investments. Wren nodded to gen AI as a game-changer for the combined entity and expects it to transform how ads are created, optimized, and delivered. Wren’s vision is to pool investments into technologies that can revolutionize advertising practices and cement Omnicom’s leadership in the next phase of media innovation.

Omni, Flywheel Digital, and Acxiom: a potent combination

Acxiom, which bought IPG for $2.3 billion in 2018, has a wealth of first-party audience data and gives the newly formed Omnicom a massive advantage in targeting and personalized marketing, a space that is gradually becoming automated.

“Together, they’ll command roughly a third of all U.S. media billings [for media buying],” said Ana Milicevic, co-founder, Sparrow Advisers. “When you think about how much value various algorithmic and AI-driven media optimizations like Pmax have generated on the walled garden side, it becomes an interesting proposition to enable that at a holdco level.”

Pairing Acxiom’s data with Flywheel, the commerce media company Omnicom bought for $800 million last year, will mean the combined entity can unlock consumer insights and drive precision marketing, positioning it to challenge Publicis’ media strength and expertise.

“The combination of the Omni marketing operating system, Flywheel Digital, and Acxiom capabilities is a potent one, enabling Omnicom to better compete with Publicis Groupe, its Epsilon PeopleCloud, and recent commerce acquisition of Mars United,” wrote Jay Pattisall, VP, principal analyst at Forrester. 

Publicis and WPP have touted large investments in AI. The former has committed a whopping $326 million over the next three years to fuel its CoreAI initiative. WPP has invested over $300 million in AI in 2024 alone.

As we know, successful AI models need to be trained on huge data sets. A larger scale means AI will benefit from more data across a broader range of clients, campaigns, and regions.

“The more data fed into AI, the better it works, [making] a bigger agency entity potentially more successful with AI,” said Myles Younger, head of innovation & insights, U of Digital.     

Yet, these ad-holding giants face stiff competition from smaller agencies and AI startups, both offering faster, more cost-effective AI services, disrupting traditional ad models.

Integration and data differentiation challenges

While Omnicom and IPG aim to become central players in the data and identity arms race, they face inherent limitations by being part of a holding company model.

While the holdco structure can offer cost efficiencies for clients, it also restricts their ability to be fully agnostic in data offerings, unlike independent players like LiveRamp, said Shiv Gupta, founder, U of Digital.

“Any of these tech stacks—Epsilon, Acxiom, and Oracle—which all position themselves as data or identity solutions, lack meaningful differentiation,” said Gupta. “The ceiling is generally similar for all three.” 

Integrating tech stacks, merging Acxiom’s data, Flywheel’s commerce media, and Omnicom’s legacy operations, will require careful execution.

“How do they bring the teams together thoughtfully? How do they integrate tech?” said Gupta.

These decade-old agencies will also need to adapt quickly enough to fend off nimble competitors using more modern models and technologies. A larger agency could become “less flexible and slower to react,” said Mateusz Ruminski, VP of product, PrimeAudience.

Ultimately, the success of the acquisition hinges on how they leverage data—key to AI success—and identity solutions to strategically pitch and win new business.

“Publicis has created the blueprint on this,” Gupta said. “Why Publicis is winning on the back of Epsilon is because they do a good job of telling the story of why having a unified data stack is so valuable, in the new business pitch.”