Publicis says it will deliver on business outcomes or your money back
Publicis Groupe is putting its $4 billion acquisition of data-marketing firm Epsilon to use through a new offering it’s calling The Pact, that offers clients a 100 percent refund should it fail to deliver on specific business outcomes.
The Pact applies to only small-to-medium sized businesses, which Publicis CEO Arthur Sadoun describes as companies earning between $10 million and $1 billion in revenue. Clients using the program tell Publicis what key performance indicators — or KPIs — they’re seeking, such as a specific increase in sales, a particular coupon redemption rate or new customer acquisition target.
If Publicis fails to deliver on 100 percent of the agreed-upon KPI, then the client will receive a full refund, according to Sadoun. “If it doesn’t work we will give the money back — it’s that simple,” says Sadoun. “There is a lot of science behind this, otherwise we wouldn't be so bold.”
There are some caveats. Clients must spend at least $75,000 in advertising over the course of three months. And results are committed to be delivered at the end of a campaign, with measurement milestones in between.
Sadoun says the holding company was initially going to debut The Pact at some point in the near future, but accelerated its rollout following the novel coronavirus pandemic. Small-to-medium sized businesses “are facing an almost impossible equation,” Sadoun says. “They are cutting costs and they have no alternative to invest for what will now be the new normal.”
Although Publicis’ latest offering aims to drum up new business, it will also serve as a blueprint for the company’s greater ambitions, as the holding company says it will debut a similar offering for its larger clients in the future. In the meantime, some large enterprise customers already have portions of their business that could be considered as SMBs, the holding company says, and those companies would also qualify for The Pact in its current state for specific segments of their business.
“The long-term implications here could result in a bit of rewiring of how the ad industry can work,” says Jay Pattisall, an agency analyst at Forrester. “This could change the way agencies and companies set up their contracts and that could rewrite the economic model for the industry should it gain enough traction.”
The Pact heavily relies on Epsilon’s capabilities, which at its core combines transactional data, marketing, identity management and represents more than 200 million people. When Publicis acquired Epsilon, it also received ad tech company Conversant, which will significantly underpin much of The Pact’s offering.