Romeo and Julie-data

Why agencies are merging with data companies?

Jacques Van Niekerk
CEO Wunderman Data Wunderman Thompson Data

In the past year, we’ve seen a scramble of consolidation in data and marketing, as brands are struggling to gain insight from the vast amount of data produced by our digitally transformed world. Among others, we could mention Dentsu’s acquisition of Merkle, Interpublic’s of Acxiom, and most recently Publicis’s of Epsilon.

While analysts fret over whether these moves are good fits or bad, the overarching trend is clear. Marketers no longer see data as a measurement tool but as a central strategic asset, necessary for competing in the modern marketplace. The big question, of course, is why. Why has data moved from a valuable sideshow to a center-stage player in so short a time?

To find the answer, we must start with where customers are increasingly spending their time. The so-called walled gardens—Amazon, Facebook, Tencent, Weibo, and so on—are gaining their attention and, more importantly, harnessing their data. Unfortunately, they are also blind spots for marketers. Brands either cannot see their customers on them or can only get a partial view at the cost of advertising premiums.

There’s an even darker issue for brands. While they need to be where their customers are, the more they engage on places like Amazon or Instagram, the more they are allowing those platforms to scoop up their data and customers. There’s nothing to stop those companies from using the insights they gain to inform their own product strategies in the future.

So how can marketers fight back? The answer is neither simple nor easy, but it explains a lot of the consolidation that is happening in the market today. To understand why, we need to look at three trends and see how they are coming together to shape the winners and losers of the future.

First-party data and privacy

Today, companies are gathering more and more data from more and more sources, but data without proper handling, permissions, and usage rights is useless. That’s where first-party data experts come in. They know how to ingest data, organize it, ensure privacy by design, and then ultimately apply it in ways that add value. Many of the recent mergers and acquisitions in the advertising sector are about gaining deeper expertise in this critical field.

Why critical? You can best think of first-party data as the DNA of the brand. It’s something you have that neither your competitors nor the wall gardens have. If you’re looking to gain a competitive advantage, you can’t merely use the same data and algorithms as everyone else. You need to discover the unique and unexpected needs of your customers, and without first-party data, that is impossible to do. For example, if you’re a retailer, your competitors can know your customer’s location and general purchasing behavior. But only you have insight into the time they spend in your channels, only you can reward their behavior for celebrating you on social media, only you can find new customers exactly like them, and so on. Your data gives you a wealth of insight and options about them that your rivals simply don’t have.


 Identity management

First-party data is great, and it is also limited. It tells us how people behave when they’re interacting with a company, but it doesn’t paint a rich picture of their wants and needs. It also doesn’t tell you where you can find more people like them. This brings us to our second major topic: identity management. This capability allows you to know who your customers are, their preferences, where and how to reach them, and what kinds of offers will add value to their lives.

Above all, identity resolution and management is a science that produces human insight that allows brands to meet human needs and anticipate demands. Today, it is a company’s number-one marketing asset. And because identity resolution is essential to providing a consistent customer experience, it should be at the heart of all brand-building. Recent shifts in the marketplace suggest that brands are increasingly demanding partners who can help them both manage customer identities across a fragmented ecosystem and gain actionable insights about what’s important to them.

Machine learning and AI

This brings us to our third major trend: machine learning and AI. Above all, these tools enable brands to not only know what customers want, but even predict and anticipate things they don’t already know they need. Thanks to the arrival of massive cloud computing resources, we use machine learning and AI to unlock these kinds of insights and gain more value from our data assets than ever before.

Machine learning and AI also help in several additional ways. They can deliver increased personalization and better customer service. They enable us to be always-on, to scrutinize micro-moments in the customer journey, to learn from each of those interactions, and to continually innovate with data to gain even more understanding.

Finally, machine learning and AI can help brands find their best new customers. By looking at trends in products, services, and shopping patterns, we can identify new customer segments and zero-in on the right market positions to reach them. That’s why machine learning and AI, when combined with individualized data and relevant communications, often deliver outsized results for brands.


In a nutshell, the wave of recent consolidation is all about the customer experience. Marketers and their agencies are trying to marry better data, machine learning, and AI capabilities with creative firepower to improve the customer journey wherever they can. The trick, of course, is that it’s much easier to say you do these things than to actually do them. Moving forward, brands and agencies will need to gain experience in the field and evolve their companies to be more data-responsive, respectful of privacy, and aware of cultural nuances—while still staying creative at heart.