‘A more formidable front’: With IPG, Omnicom’s retail media business could rival Publicis

Omnicom Repurchase of IPG could make it a bigger competitor to Publicis in the retail media space.

Retail Media growth is a positive for ad holding companies, and all are creating and acquiring commerce and retail services. But Publicis has dominated the sector in terms of acquisitions.

Over the past five years, Publicis has acquired data company Epsilon for $4.4 billion, retail media CitrusAd technology platformecommerce analytics company Enjoy for around $200 million, and a commercial marketing agency Mars United Commerce. This buying spree has put Publicis “well ahead” of its competitors when it comes to the data and technology needed to power retail media companies, said Andrew Lipsman, an independent retail media analyst.

The other holding companies alone have not managed to follow Publicis. However, together, Omnicom and IPG might be able to compete.

“Agencies are currently engaged in an arms race for data and technology,” Lipsman said. The more assets agencies can accumulate, “the more agencies are able to win contracts and not be completely disintermediated by walled gardens.”

An arms race on retail media

Omnicom and IPG have recently separately invested significantly in commerce and retail media.

Last year, Omnicom purchased digital commerce agency Flywheel for $835 million. IPG acquired data company Acxiom in 2018 for $2.3 billion, which was folded in Kinesso earlier this year. Last week, IPG also reached an agreement to buy retail analytics company Intelligence Node for an estimated valuation of $100 million.

In a Dec. 9 investor call, IPG CEO Philippe Krakowsky said Omnicom hopes to cross-sell Acxiom and Flywheel’s services.

“Combining Flywheel’s capabilities with IPG’s recently acquired Intelligence Node could create a formidable retail media stack with both front-end optimization and back-end analytics,” Dan Maguire, director of retail media at Galetold ADWEEK.

This technology stack could help Omnicom succeed in a more commerce-driven advertising industry.

“When you start putting these pieces together, they have a more formidable front to realize the potential of retail media,” Lipsman said.

Evolving Retail Media

The IPG acquisition “brings a lot more scale and weight” to Omnicom’s commercial media business, said Conor McKenna, a partner at investment firm Luma. This could help Omnicom use data more effectively for its customers, he said.

“We’re talking about the need for them to transform what their businesses have always been, consolidating them and being able to invest more in technology and rationalize some of the prevalent personnel costs and disjointed nature of these businesses,” McKenna continued .

Still, there is a long way to go before the merger is approved, and an even longer way before the companies are integrated to the point where all the potential benefits are realized.

Hurry up and wait

Phillippe Krakowsky, CEO of IPG told staff in internal memo that the deal is not expected to close until the second half of 2025. But questions remain about where the layoffs could take place.

“The advertising industry is long overdue,” Meghan Corroon, co-founder and CEO of data intelligence platform Clerdata, told ADWEEK. “It looks like evolution by acquisition.”

For advertisers, however, this evolution may not come quickly enough to avoid the trial and error of the retail media sector working across its growing pains.

“It takes time to transform such a large ship, and I hope to see a thoughtful but effective deployment of these new capabilities to truly benefit their customers,” Corroon said. “Retail media investment decisions are now weighing on FMCG, and I don’t think they can wait a few more years to better understand what actually works and what doesn’t.”