Seeking Out Opportunities For Digital Transformation in a Dynamically Evolving Industry

Challenge

Interpublic Group, a global leader in modern marketing solutions, needed to transform into the agency of the future. Michael Roth, Chairman and CEO of Interpublic Group has been speaking publicly about this transformation for years. But what exactly does it mean to be the agency of the future?

Ethically Sourced Data: Acxiom Marketing Solutions (AMS) is a pioneer and thought leader in data stewardship. Coupled with IPG’s long-standing commitment to transparency in its media practices, AMS’s focus on data ethics resulted in a differentiated offering that would allow clients to trust their agency as a protector of data the same way a bank protects its clients investments.

Ability to Bill for Strategic Services: Historically, agencies have lost the ability to bill for strategic services and now only earn a small margin on media and some billings for full-time employees on an hourly basis. Strategic support fees have been moving to consulting firms. The strong AMS business, grounded in long-term contractual relationships, diversifies IPG's revenue and earnings mix.

Multi-Year Client Engagements: Due to the mistrust in the market and competition, agencies must win and re-win business all the time. This makes it challenging to provide quality services to customers and for the agency to earn profits from those services.

In March of 2018, IPG Mediabrands was informed that there was an opportunity to acquire Acxiom Marketing Solutions. Would this acquisition provide the 88 year-old holding company with the data capabilities necessary to differentiate their offering from competitors now and for years to come? The IPG leadership team turned to The 614 Group amongst others to help consider this complex decision and determine the positive and challenging obstacles and opportunities in completing this transaction.

Execution

We quickly assembled a team of experts who were able to provide an unparalleled level of service from day one. This enabled our client’s in-house team to remain focused on running their business while we conducted an in-depth transactional due diligence.

Over the course of 8 weeks, The 614 Group team:

  • Interviewed senior agency executives to gain context on what CMO’s expect from them with regard to data and targeting capabilities
  • Met with 20 team members from various data companies in the consideration set over the course of two onsite trips and several diligence conference calls
  • Reviewed critical documentation provided by IPG Mediabrands
  • Conducted independent competitive research to identify viable options for the client to achieve their digital transformation
  • Built a working financial model that projected post-acquisition revenue for the next 5 years

The 614 Group supported us through a broad set of business and operational questions. We fully appreciated the team's advice and guidance in this major effort for our business.

Philippe Krakowsky, EVP, CSO of Interpublic and CEO and Chairman of IPG Mediabrands

Results

After months of diligence and process, IPG Mediabrands was successful in acquiring Acxiom Marketing Solutions for $2.3 billion dollars.

Developing data-led offerings, across the holding company, will further position IPG to accelerate future revenue and earnings growth.


Want to learn more about how the 614 Group can help your organization navigate the intricacies of M&A?