U of Digital Newsletter - 9/25/24 (free)

Author

Shiv Gupta
September 25, 2024

September 18th-September 24th

Below is a roundup of last week’s notable industry news, with summaries and our opinions. Two weeks of #USvGoogle is in the books, and a big-time acquisition in agency holdco land!

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Top Story 👁️ 

Summary: The deal for Mars United—billed as the world's largest independent commerce marketing company—is reportedly worth $600M. Mars United, with more than 1,000 employees, offers extensive commerce media expertise, consulting services, and shopper intelligence data. The deal will help Publicis strengthen its full-funnel marketing capabilities, develop better strategy, insights, and measurement, and help the Paris-based agency holding company deepen its hooks in red-hot commerce media. 

There are numerous possibilities for how Publicis can leverage Mars United’s assets and expertise. For example, Publicis plans to combine Mars United's shopper data with Epsilon’s first-party data to provide more visibility into the shopper journey. Publicis can also marry Profitero's commerce and operations sales data with Mars United’s assets to deepen its expertise and understanding of online and offline commerce marketing performance. 

Publicis has been very acquisitive in recent years. For example, it bought Epsilon for $3.95B in 2019; Profitero for $210M in 2022; ecommerce company Corra for an undisclosed sum in 2023; and Influential, the world's largest influencer marketing agency, for $500M in July. And in 2021, Publicis acquired retail media tech platform, CitrusAd.

Deal Grades:
Publicis: B+
Mars United Commerce: A+

Opinion: Wow, what an incredible outcome for Mars United Commerce! The agency holding company arms race continues. Remember: late last year, Omnicom acquired Flywheel Digital for $835M.

The retail media network (RMN) market is coming out of a 2-year run where 30+ RMNs launched on the back of COVID-induced ecommerce growth, signal loss in digital advertising, and the ad tech industry searching for its next, big growth vehicle. While standing up an RMN has become mission-critical for retailers trying to compete with the Amazons and Walmarts of the world, standing up an RMN is NOT EASY. Just ask Gap Inc.

Ad tech intermediaries like Criteo, The Trade Desk, and Yahoo have pounced on the opportunity to aggregate data and inventory from retailers who don’t want to build on their own. However, we believe that many retailers will continue to try in order to minimize tech dependencies and maximize their margin (and many will likely fail). Publicis is betting that Mars can help them succeed, and in turn, help Publicis grow in an extremely competitive, low-margin, slow-growth agency market.

When all is said and done, we believe there will only be a few independent, fully in-housed retail media networks standing (e.g. Amazon, maybe Walmart, who else?), and perhaps 2-3 large ad tech intermediaries. Which means that more consolidation is coming. The other major holdcos are keeping a close eye on all of these deals and may decide to get in on the action at some point. Big tech is always looming. Microsoft has divested PromoteIQ and chosen to partner with Criteo. Criteo was also rumored a few weeks ago to be discussing a merger with Skai in a deal "north of $500M" in value. That price tag just went up.

More action to come!

This opinion was written in collaboration with U of Digital Retail Media Expert, Justin Sparks.

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That’s It For This Week 👋

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