French advertising giant Publicis Group is flying high. Now it's going shopping.
Last week, Publicis CEO Arthur Sadoun said his company was “doubling” its AI strategy by “more accelerating the acquisition of Bolt-On.”
The Bolt-On acquisition refers to target purchases that strengthen existing companies and operations rather than transformative transactions that turn Publicis into a whole new business sector.
Publicis, a leading advertising performer, has spent around 600 million euros and about $705 million on this year's acquisition, securing an additional 300 million euros in M&A in the second half.
All across Madison Avenue, businesses are working on ways to leverage AI to provide new services to their clients, preventing technology from overthrowing existing businesses. Publicis said in 2024 it intends to invest 300 million euros over the next three years in an AI strategy centered around an internal platform called Core AI.
What would you buy?
Tristan Rice, head of European M&A Practices at advisory firm SI Partners, said Publicis is likely to place speculative bets early on emerging technologies. It will help to avoid a fierce bidding war as acquisition targets grow.
The pitch to startup founders is that Publicis' client base helps drive business growth. The agency group will also make long acquisitions to the table with the aim of enabling founders to realize more value from sales over time, he said.
Publicis Groupe CEO Arthur Sadoun presented at the 2024 ad group's CoreAi launch presentation. Publicis Groupe
Business Insider spoke with five ads and M&A insiders who shared predictions about what Publicis could target.
Here were some themes:
- AI startups have the expertise to create agents that handle the workflows of marketing campaigns
- Companies that use AI to convert big data into useful analytics
- Other technologies that improve the efficiency and effectiveness of the agency sector, such as content production and strategy.
They also named it a specific marketing-centric AI startup that appears to be on Publicis' radar. (This does not mean that Publicis is having a conversation with these startups.)
A spokesman for Publicis declined to comment.
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AI-driven ads can come from Persado or Superscale AI
The Toys “R” Us and brands from Coca-Cola to Kalshi used AI to create TV ads that feature a mix of consumer responses. However, generative AI technology has been constantly improving and has helped to reduce the time and costs associated with creating campaigns.
Karsten Weide, principal and chief analyst at W Media Research, said: Persod You may be interested in publicis. The company automates the production of marketing messaging based on emotional triggers and other data. Founded in New York in 2012, Persado has raised $86 million to date.
Weide said Persado's technology will be combined with Publicis' Epsilon Data Arm to help create more personalized and compelling marketing messages.
Assaf Baciu president Persado said it would be wise for ad companies to look for AI solutions as a differentiation point, but the company has expanded its capabilities beyond the advertising sector to areas such as financial services.
Patrick Hede, co-founder of Superscale. Martin Flind
Other places, Super Scale AI Andrew Buckman, Chief Growth Officer at Adtech Company Azerion, said Publicis could be interesting.
Startups sell themselves as a kind of “ai cmo.” Brands can enter the URL of the product they want to sell, and use a realistic AI-generated library of actors and characters to generate Tiktok or Instagram campaigns almost instantly. Superscale raised a $5 million pre-seed funding round in June, led by VC company Creandum.
Superscale co-founder Patrick Haede said the company is not considering an acquisition, but understands why it could be identified as a potential target.
“AI capabilities fundamentally transform ads in every possible way, especially in terms of content generation, where we are building our major platforms,” Haede said.
AI agents built by Newton Research or Akkio could be interesting
Openai CEO Sam Altman said 2025 will be the year AI agents will “participate” in the workforce as they embrace the trends. An AI agent usually refers to a virtual assistant who can autonomously complete tasks.
Startups are betting that AI agents will grow in the advertising space as well. said Ana Milicevic, principal of digital consulting Sparrow Digital Holdings Newton's Research “We've already made a lot of progress with our agency.” We create AI agents to handle data science projects and work with brands and publishers.
John Hoctor, founder and CEO of Newton Research, was behind the media measurement company data and Math, which was sold to the published data company Liveramp in 2019. Founded in 2023, Newton Research has raised approximately $13 million so far. Newton's study declined to comment.
Miricevic said too akkioCreating AI agents to help media institutions better understand the data may be suitable for Publicis. Founded in 2019, the Cambridge, Massachusetts-based company has raised approximately $18 million in funding.
Akkio co-founder and COO Jon Reilly said the company has built an operating system that automates “grantwork,” allowing agents to gain pitch, protect margins and focus on strategy.
“Agencies urgently need the next generation of AI operation layers to modernize fragmented stacks,” Riley said.
Generally speaking about AI space, without naming a particular startup, Eric Franci of VC firm Aperiam said that it will become a category where companies that create agent tools for marketing workflows will monitor M&As.
He imagines scenarios where AI agents can drive processes like advertising optimization, campaign planning, and measurement. The outcome, he said, would have teams that focus on “faster turnarounds, better performance” and “higher value, client success-oriented tasks.”
AI optimization and modeling from Cassandra and Prescient AI can provide value
Ad optimization is used by humans to watch ad campaigns like Hawk and adjust their spending, targeting and creative messaging based on the performance of the ad. AI can automate many of these “practical board” tasks.
Wide said A highly foresightful AIAd optimization platforms that predict the return on ad spending for e-commerce ads could be the target of getting something like publicis. Miami-based Prescient has raised $20 million so far.
“It's exciting to be mentioned in such a critical growth area,” said visionary AI CEO Mike True.
“With some of the brightest minds in this field, we are now focusing on moving forward with technologies that seem to define the future of composite measurement,” he added.
Cassandra Cofounders, Cristian Nozzi and Gabriele Franco. Cassandra
Based in Italy Cassandra According to Azerion's Buckman, he could also be a candidate for the smaller bolt-on acquisition. Specializing in marketing techniques (marketing mix modeling), known as MMM, it helps advertisers assess how much and where they should allocate their advertising budget. The company raised 2.3 million euros, about $2.7 million in funding.
Cassandra co-founder and CTO Cristian Nozzi said the company is close to achieving $2 million in annual recurring revenues, three times the amount it registered last year. He added that the company aims to provide “size-gradability measures at scale with little or no effort to every organization around the world, regardless of size or budget.” In marketing, incremental refers to measuring the impact an advertising campaign has had on promoting additional sales.
