Publicis Groupe Makes ‘The Pact’ With Midsize Clients, Guaranteeing Business Results

The holding company accelerated the launch of its Epsilon-powered business outcomes solution

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The Pact means if agreed-upon KPIs aren't met, clients receive a full refund on their investment. Publicis/The Pact
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Key insight:

At a time when clients are facing unprecedented challenges, Publicis Groupe is offering a new solution.

Today, the holding company is introducing The Pact, a business outcomes solution powered by Epsilon’s identity management platform and machine learning, guaranteeing that digital marketing investments deliver on key performance indicators (KPIs) including sales, new client acquisition and return on ad spend. If metrics agreed upon in advance aren’t met, clients are given a 100% refund on their investment.

“With the acquisition of Epsilon, the plan has always been to create data-led packages using AI technology to guarantee outcomes. We’ve accelerated that product roadmap in service of the times, and we’re starting with the clients that need it most: midsized companies,” Publicis Groupe CEO Arthur Sadoun said in a statement.

Speaking to Adweek, Sadoun defined that category as companies generating between $10 million and $1 billion in revenue, and explained that the launch had been originally slated for the summer but was accelerated given the strains placed on these clients by the impact of the coronavirus pandemic.

“We found ourselves in a situation where many of our clients were facing an almost impossible equation,” he said, with the simultaneous need to cut costs and find new sources of growth for the future. “This is where outcome-based solutions can be a great way for them to secure every dollar invested.”

Publicis Media chief strategy officer Sean Peters explained that midsize businesses represent a small percentage of businesses in the U.S. but roughly one-third of its GDP, and are facing distinct challenges in the current environment.

“They are really in the middle of that conundrum of investing in business and looking at cash,” he said, with over two-thirds of midsize businesses saying they are going to delay growth investments “while identifying the need to preserve cash as the second most important thing, only after keeping up with supply chain.”

“Part of our focus in doing this is making sure we can aggressively go after and help them now once we align on KPIs,” he added. “They’re going to need that in order to be recovery ready.”

At the same time, consumer behaviors have rapidly changed in recent weeks, with use of digital channels proliferating as consumers increase streaming habits and transition to ecommerce.

“The rapid shift of behavioral data signals from our new normal of social distancing and shelter in place has further enriched the heart of Epsilon, Publicis Groupe’s data platform, by increasing digital touchpoints by more than 20%, making it an even more powerful, precise source for consumer understanding and personalization at scale,” Epsilon CEO Bryan Kennedy said in a statement, adding that the combination of this digital proliferation with Epsilon’s “200 million Core IDs, powerful machine learning and a private exchange of thousands of publishers” allowed it to create “an outcome-based product for clients who need it most.”

Speaking to Adweek, Kennedy characterized The Pact as a “co-investment” between Publicis Groupe and its clients, with the holding company putting its fees and media expenses on the line, explaining that the strength of Epsilon’s Core IDs combined with powerful machine learning gave it the confidence to provide the guarantee.

“We’re moving into a world of heavily data-driven, machine-led marketing, which naturally translates to an outcome-based world where accountability is at the forefront,” he said. “That was a clear rationale and thesis behind Publicis Groupe’s acquisition of Epsilon.”

Doubling down on its Epsilon bet

Sadoun acknowledged that The Pact is not without risk, explaining that any meaningful commitment comes with such risk.

“We have all the assets to secure this bet,” he said. “We want to be on the side of clients and believe we can deliver on a consistent basis.”

Kennedy said The Pact was “born out of a lot testing and real delivery,” anticipating it can deliver a success rate of more than 95%.

“If you think about what clients are thinking about with reopen strategies,” Kennedy said, those strategies are “highly variable, changing all the time. When you think about how to plan and deliver media in an efficient way, you can’t do it without something highly automated, [driven by] machine learning.”

The early introduction of The Pact follows Publicis Groupe’s rollout another product ahead of schedule. Its AI-driven connectivity platform Marcel went live for employees in the U.S. earlier this month as part of an accelerated global launch.

Sadoun characterized The Pact as beneficial to Publicis Groupe employees as well as clients, calling it a “strong action that gives confidence to clients and our people that we are weathering the storm and recovery ready.”

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@ErikDOster Erik Oster is an agencies reporter for Adweek.