Publicis and Microsoft Link Up Products for Data Push
23 March 2017 - 3:29AM
Dow Jones News
By Alexandra Bruell
Publicis Groupe and Microsoft Corp. have decided to expand a
pilot initiative that combined the ad giant's Cosmos data product
with Microsoft's Azure cloud service. The partnership highlights
Publicis's push to generate more revenue from intellectual property
and compete with consulting companies, as well as Microsoft's
ambitions to expand its cloud-based offerings.
Cosmos gleans people's behavioral data for marketers and
constantly updates individual customer identities that are stored
in the Microsoft cloud. The marketer uses that customer information
to create and send targeted emails and digital ads to
individuals.
"How customers behave in real time changes how we market to
them," said Shannon Denton, chief strategy officer of Publicis
digital agency group SapientRazorfish. "When we're competing with
other agencies but also with consultancies, this data is a huge
advantage. That's the big play and why we're going to continue to
invest in this area."
The partnership comes as marketers rethink how they target their
customers and attempt to piece together previously disparate
marketing functions, such as customer relationship marketing and
ad-buying, and make more effective use of customer data.
It's also a potentially lucrative play for the agency and other
Publicis shops that now will have access to Cosmos and Azure.
SapientRazorfish is charging clients a licensing fee for use of
Cosmos. It's also collecting a small percentage of the usage fee a
client pays Microsoft when it uses Cosmos and Azure to host and
update its customer data. Additionally, Publicis agencies may also
generate service fees for supporting the client's marketing.
The goal for the agency group is for 5% to 10% of its revenue to
come from intellectual property, through products like Cosmos, said
Mr. Denton. Typically, agencies generate under 1% of their revenue
from IP, he said.
Licensing intellectual property is a departure from the common
agency services model in which an agency sells strategy, design
work and even digital product development for individual marketers.
"Were taking a fresh look at [our IP] and making sure we're going
after it more aggressively across the whole organization," he said.
"It's a competitive market. We need to differentiate and find new
revenue sources."
The partnership also offers insight into Microsoft's strategy to
build out its cloud-based offerings and compete with companies like
IBM, which has been aggressively promoting its artificial
intelligence product Watson.
The partnership with Publicis is "one of the biggest bets we're
making" in the enterprise transformation space, said Joseph Sirosh,
corporate vice president of the data group at Microsoft. "Marketing
is an area where our customers want to get as much insight as
possible and use predictive analytics and artificial intelligence
and all the rich data from sensors and all the customer behavior,"
he said. "Cosmos is very much a reflection of the core capability
we're bringing into the cloud."
SapientRazorfish's Mr. Denton describes a scenario in which a
cosmetics company might use Cosmos and Azure to glean data from
customers who use its app. From the app, which shows customers how
makeup shades might look like on their face, Cosmos is able to
create customer profiles that include data about chosen products
and skin tones, as well as other customer information the agency
can plug in, such as data from client loyalty programs or
behavioral or purchase data from the agency's third-party email
vendors. That data is stored in the cloud.
The agency and marketer can then use that information to
recommend products before or after a client purchase. The agency
works with companies like Adobe that can help it use the data in
the cloud to serve digital ads and promotional materials
recommending specific products to the targeted customers and other
customers with similar traits. Microsoft Azure also has a
partnership with Adobe.
The Publicis and Microsoft relationship dates back nearly a
decade. Publicis acquired Razorfish from Microsoft in 2009, for
about $530 million. The deal included a multi-year commitment from
Publicis to spend a certain amount with Microsoft in exchange for
specific ad rates.
"There's been a history there," said Mr. Denton.
Write to Alexandra Bruell at alexandra.bruell@wsj.com
(END) Dow Jones Newswires
March 22, 2017 12:14 ET (16:14 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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