Essential Fourth-Quarter Stats for Agencies and Media Companies

The ups and downs of various industry leaders

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How agencies and media companies performed in Q4 2019. Getty Images

Editor’s note: Adweek worked with Matthew Scott Goldstein, a consultant with a deep knowledge of the media industry, to craft his quarterly newsletter into an Adweek article. Through his findings on various industry earnings calls, we’re bringing you insights about how your favorite brands, agencies, media companies, publishers and tech companies are performing on a quarterly basis. His goal was to go past what the trades were focusing on, which mostly revolved around revenue, and tap into the nitty-gritty data shared on these calls.

This iteration focuses specifically on agencies and media companies in the 2019 fourth quarter.

  • Publicis: The decision announced by Google will have a significant impact on the entire marketing ecosystem: agencies, publishers, clients and customers. The truth is we still don’t know at this stage what will replace cookies at Google Chrome, so I have to be cautious in what I’m telling you, but there are some certainties that I can share with you at this stage. First, when it comes to Publicis, this announcement implied limited risk and a far bigger opportunity, thanks to the acquisition of Epsilon. The data gathered by Epsilon is actually very diverse. It’s online and offline. It’s behavior and social demographics. It’s intent and transaction. Let’s go into facts. Epsilon can see more than 55% of a noncash transaction in the U.S. You are what you buy. They have gathered 200 million individual IDs, which is a base to create customer relationships, and, out of those 200 million individual IDs, they are going up to 7,000 attributes to look at how people behave. This why any decrease in subordinate-party cookies will not materially impact Epsilon’s rich data sets.
  • IPG: Two-thirds of Acxiom business is just managing first-party data. With respect to cookies, I know everyone’s writing about it. We’ve been worried about the cookies and the regulatory environment with respect to Google now for years, and we’re building up ways to work around it. We’re highly confident we will have a solution in place to address that issue. And we’re working closely with Google and the other providers to make sure that in fact happens.
  • Omnicom: With respect to your first question regarding cookies, honestly, we’ve been expecting this for some time now. It’s not new news to us. It will make targeting a little bit more challenging than it was in the past. Then it certainly will make Google stronger. But in anticipation of it, that’s why we work so diligently on the creation of Omni and the enhancements that we made to it.
  • WPP: As far as cookies are concerned, I think the first thing that is important to understand the background. There’s increasing concerns from consumers and regulators about data and about data leverage. And a feeling that third-party cookies were a way for people to hover up data, if you like, across the internet in a way that wasn’t compliant with what people expected. I think it’s right that we’re controlling this, and consumers need to consent to what’s going on with their data. I think what’s happened with cookies is symptomatic of a larger trend within society: The people want to have greater control over their data and how that’s being used. And this is just one example of it. Secondly, we have to understand what’s happening. So Google announced that they’ll stop supporting third-party cookies inside Chrome. That’s a position that’s already been taken by Safari. And if you look at prices in programmatic auctions on Safari, they’re lower than they are on Chrome, already, because there’s less data, there’s less value in those impressions. So I think programmatic media will be negatively impacted by this change. And that will make life harder for intermediaries, ad networks, affiliate networks, particularly people that rely on conversion tracking and cost per attribution, or cost-per-click pricing. Now, at the same time, Google has said that they’re going to build functionality into the browser that will allow the basic premises of what we need in terms of ad tracking; ad tracking, frequency capping, much of what we need to run a media campaign will be part of the browser, whether that will be an industry standard, a Google standard, we don’t know yet. Probably, I think it’s most likely to be a Google standard, though we’d like it to be an industry standard, and we’re working closely with Google and what these standards will be. In terms of the impact for the industry, I think it’s going to be better for those companies that have logged-in users, so that’s Google, Facebook, premium publishers, people with mobile applications. It will, to some extent, reduce the value of data generally in the ecosystems. It’s harder to execute and makes life tougher for intermediaries and people that don’t have third-party relationships. For data owners, particularly those that rely on cookies to value that data, I think it’s going to make life sort of tougher. But what will make that even tougher is sort of the general trend towards regulation of how we use data. For WPP overall, programmatic that’s heavily cookie dependent is a relatively small part of our business.
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Matthew Scott Goldstein is a versatile and hands-on, data-driven consultant with deep knowledge of the media business.