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by John Forcucci
I heard the number over my morning latte: $35.1 billion. Billion. Big number? Sort of.
That’s the value of the merger between advertising mega-agencies Omnicom and Publicis announced Sunday. It’s the total valuation of the two companies.
Sounds big, doesn’t it. Now consider this: In a single year, Google brought in $50 billion in advertising revenue. By contrast, the two agencies only brought in a combined total of $22.7 billion.
“Big” has taken on new importance. Both Omnicom and Publicis were giants on their own. But in the battle for the consumer, they were being dwarfed not only in the contest measured by money, but by other numbers looming large in the online world: Data. Big Data.
In fact, I was shocked to see Big Data cited as a major reason for the merger in pretty much every publication that took a good look at the Omnicom and Publicis merger, including the New York Times and Wall Street Journal.
I shouldn’t have been that surprised. You’ve read about Big Data and Personalization in the pages of this blog. I think I was more surprised that these issues had suddenly moved to the front page instead of occupying a stealth area in the background.
What does Big Data have to do with advertising and marketing? And why would the two leaders in this world band together? When such players band together, it’s helpful to look at the competition they have in common. Google is their most formidable common competitor. Google has both the platform and the built-in data collection that allows it to so effectively sell ads—on its own platform. Online platforms like Facebook, Twitter, YouTube, Pinterest and many others share the ability with Google to track and evaluate our every virtual action and decision as we while away the hours on their turf.
Like the National Security Agency (NSA), Google and its counterparts can see the patterns, connections and behaviors and then apply that knowledge to what you and I might do next. They can figure out our personal preferences and buying habits. This puts Omnicom and Publicis at a disadvantage in this battle, despite their size. While they have lots of money, they don’t own the platform. They can only rent it. And so, they are not as powerful.
By pooling their resources, the two companies hope to extend their Big Data and Personalization resources and expertise, to help clients like Coca Cola be even more successful in understanding “the consumer” – i.e. you and me.
With this significant move, Omnicom and Publicis represent a significant milepost in the rapidly changing world of marketing and advertising. The quiet entry of Big Data and Personalization is not so quiet anymore. The rest of the marketing and advertising world cannot help but follow their path into the world of Big Data and Personalization.