Publicis to acquire Lotame—what the deal means for its AI strategy

Publicis Groupe is set to acquire data management platform Lotame as the holding company continues to stockpile data assets that it can combine with AI capabilities to help clients more effectively target and reach consumers. Lotame, which was founded in Columbia, Maryland, in 2006, works with 4,000 brands and publishers spanning 109 countries. It has 150 employees and will retain its company name. Terms of the deal were not disclosed, but Chairman and CEO Arthur Sadoun said that Publicis has invested $1.5 billion in data and technology over the last six months and reiterated that the holding company is expected to spend $800 million to $900 million on AI and tech acquisitions this year. Scaling data Lotame would bolster Publicis’ already extensive data stack housed in Epsilon, which provides it with data on 2.3 billion people globally. Lotame will give the French holding company access to another 1.6 billion consumer profiles, Sadoun said. Once it acquires Lotame, Publicis will be able to reach more than 90% of the world’s adult consumers connected to the internet, the holding company announced. The deal will grow Publicis’ data strength in regions such as Europe, the Middle East and Africa, and Asia Pacific. Scott Hagedorn, chief solutions officer at Publicis, said the holding company didn’t have as much coverage in APAC as it would’ve liked before this move. “This gives us a very significant footprint into APAC where a lot of other groups have struggled to get an identity capability going,” Hagedorn said in an interview with Ad Age. “We already have a unique capability in China, but this helps us to get a lot more regional coverage.” Become an All Access subscriber Get access to exclusive resources including Leading National Advertisers, World’s Largest Advertisers, Agency Report, Agency Review Tracker and TV Pricing Report. Click here Sadoun outlined how Lotame will be incorporated within Publicis’s AI platform CoreAI that was launched in January 2024 in a 20-minute video disseminated to clients and employees today. He also said that AI is “nothing without data,” noting that the more data Publicis has across different consumer touchpoints, the better the holding company can provide personalized content at scale. Personalized advertising Providing personalized content at scale is quickly becoming table stakes for the large holding companies as marketers become increasingly interested in the concept. A 2024 report by Deloitte projected that brands would increase their annual personalization budgets by 29% last year and found that the number of brands incorporating personalization jumped 50% between 2022 and last year. This need for personalization has led to Publicis acquiring influencer agencies BR Group and Influential, given their access to creator data and Influential’s own AI technology. All Access news: A decade of deals that transformed the industry “Today it’s no longer only about innovate or die at Publicis,” Sadoun said in his video announcement. “We believe that the new mantra that will redefine modern marketing is ‘connect or die.‘” While non-Publicis clients and agencies use Lotame, Sadoun said one area that attracted him to the company was its data safety. “Lotame has been working with some of our competitors … their privacy rules are very strong,” Sadoun said. “The rules that applied today will apply tomorrow. That’s the trust and transparency issue that is absolutely critical, as it is for Epsilon, as some of our competitors are using Epsilon data already.” Implementing CoreAI In the video, Sadoun showed examples of how CoreAI will be able to connect paid, earned, shared and owned media (also known in the industry as the PESO model) to further identify a consumer’s behaviors and needs, which can then lead to more personalized advertising. Before the use of advanced AI technology, the promise of connecting those four data categories was a “fragmented hypothesis,” said Carla Serrano, chief strategy officer at Publicis. “Part of the reason we’re so excited is because, as a client service, we’ve been wanting to deliver PESO with real business outcomes, to be able to give our clients transparency on what their marketing investment actually delivers in terms of sales,” Serrano said. “It has never really been done before … now there is a solution out there, but it requires connected identity.” This connection will help brands determine what channels they should allocate marketing budgets to, which has always been crucial but has become even more of a need with the rise of retail media networks, Hagedorn said. “Retail media networks came out of nowhere for a lot of CPG clients, and there wasn’t a lot of math that existed to say how much money should you allocate to traditional media versus retail media,” Hagedorn said. “What we’ve been doing with AI is essentially using the technology to rapidly build the math to help clients to do those allocations between those channels and then figure out the right way to perfect the investments against identity, which gives us the ability to measure it back to outcomes.” Publicis will also be able to build data and AI infrastructures for clients within their own companies so they can manage their marketing mix onsite, said Hagedorn. This is particularly important for clients who are especially protective of their data. Recent news: Ad tech pulls media into data clean rooms “What we’ve seen is clients want [CoreAI] in their environment, and clients want it connected to their specific data, and they want us to bring the data that we have into their environment,” Hagedorn said. “One of the most significant examples that we keep seeing is clients on the CPG front wanting us to connect to their supply chain data. Because they’re like, ‘If I know that I’m going to go out of stock, or I’m depleted in a market, I want to be able to turn off my marketing. Or if I have a lot of surplus, I want to be able to increase the marketing pressure.‘” In the announcement video, Sadoun also mentioned how CoreAI is using agentic AI, the term for AI agents autonomously performing tasks, making decisions, and interacting with customers or each other on behalf of brands or businesses. Publicis executives also spoke about its new AI service called Slingshot, which uses AI tools to help companies accelerate their implementation of AI products and create an AI roadmap for their businesses. Training employees Publicis held closed-door meetings with 30 clients during the 2024 Cannes Lions International Festival of Creativity to pitch CoreAI. Sadoun said those meetings led to Publicis implementing 55 “pilot” pieces of work for those clients throughout 2024. Once it acquires Latome, Publicis will be ready to start bringing its CoreAI to all its clients throughout the year while training all of its 107,000 employees on CoreAI by the end of the year, Sadoun said. “The big difference between today and last year is today, CoreAI was a strategy,” Sadoun said. “Today, it is a reality.” CoreAI will also be added into Marcel to act as an AI assistant for employees. “It may be true that with AI, some jobs will disappear, but with all of our people using CoreAI, we are confident that we will be creating new ones for them that have never existed before,” Sadoun said in the video. “So our No. 1 responsibility will be to train our people to embrace these new opportunities.” Ad Age Small Agency Awards Showcase your agency’s creativity, business success and commitment to a thriving workplace. Enter today

Publicis to acquire Lotame—what the deal means for its AI strategy

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