Publicis' Textbooks and WPP's Mistake Collections | My Views on the Digital Transformation of Advertising Agencies

Advertising agencies have always been good at packaging the future. Now, they themselves have become the "objects reshaped by the future."

In the global advertising industry in 2025, a restructuring of the landscape is taking place, and the logic of industry expansion has split into two paths:

One path is to pursue scale and strength, building up size through mergers and acquisitions. This path of growing big and strong continues the traditional growth pattern of advertising groups: scale brings bargaining power and cost advantages . In 2015, large - scale mergers and acquisitions were still accelerating. Omnicom would acquire Interpublic for $13 billion, becoming the world's largest advertising group.

The other path is to pursue speed and accuracy, using technology to outpace the inflection point. Rely on technology and AI to pursue efficiency and agility. The prices of data assets and MarTech companies have been pushed to new highs. Currently, the global MarTech market is expected to grow from approximately $459.6 billion in 2024 to $591.6 billion in 2025. The algorithm and platform models from Silicon Valley are replacing the creative stories of Madison Avenue.

Is it a battle for scale or a battle for speed? This is a strategic choice that determines not only the winner but also survival.

Publicis of France and WPP of the UK, these two European advertising giants, have each placed their bets on the future and headed towards different fates.

01 The Same Starting Point of Change

A few days ago, each company released its second - quarter financial report.

Publicis continued its steady and even "better - than - expected" performance in the past few years: its net revenue in the second quarter was 3.617 billion euros, a year - on - year increase of 4.6% and an organic growth of 5.9%, hitting a new high in recent years. The North American market grew by 5.3%, Europe by 4.6%, and the Asia - Pacific region by 5.7%. CEO Sadoun even rarely raised the full - year guidance in an investor conference call, increasing the expected organic revenue growth to nearly 5%.

WPP, on the other hand, had a tougher time. Its revenue in the second quarter declined by 5.5% to 6%, and the cumulative decline in the first half of the year exceeded 4%. The full - year forecast was forced to be lowered to a negative growth of 3% to 5%. This was already the second profit warning, and the capital market immediately reacted, with the stock price dropping by nearly 18% at one point that day, hitting the lowest point since 2009.

Naturally, there are background factors of the macro - economic downturn. However, when you see core clients like Coca - Cola and Pfizer being gradually poached by competitors and the North American market share declining for several consecutive quarters, WPP cannot blame all the problems on the macro - environment.

On one side is Sadoun constantly raising expectations at the earnings conference, and on the other side is Mark Read choosing his words carefully on the phone.

It's quite interesting. Sadoun joined Publicis Groupe in 2017, and Read joined WPP in 2018. They both succeeded their predecessors who had served in the two companies for more than 30 years. They are both CEOs who shoulder the heavy responsibility of transformation in difficult times.

It should be said that Publicis and WPP are almost at the same starting point of change.

Now, six or seven years later, they have taken two different paths: WPP seems to be "spreading itself too thin" among debt reduction, brand integration, and AI attempts; while Publicis has heavily invested in technology and data, creating a platform - based growth curve.

If we were to title this chapter of industry history, it might be: Publicis' Textbook, WPP's Wrong - Answer Book.

The first chapter of this "textbook" dates back to 2014, which might be the starting point of Publicis' rise.

02 Starting from the $3.7 Billion Deal in 2014

In 2014, Publicis acquired the US digital consulting firm Sapient for $3.7 billion. This deal shocked the entire advertising industry at that time.

The reasons are simple: on the one hand, this price was almost one - third of Publicis' market value at that time, a typical high - stakes gamble; on the other hand, Sapient was not a traditional advertising agency but a consulting firm centered on technology and digital transformation, with a business scope covering IT architecture, data platforms, and user experience design.

For advertising holding companies at that time, this was almost "jumping out of their comfort zones." The mainstream view in the industry was that advertising agencies should either strengthen creativity or increase their bargaining power in media buying, rather than regarding SAP systems and API interfaces as future growth points.

Moreover, at that time, the mainstream of the advertising industry was still in the "integrated marketing" stage. Although digitalization was also emphasized, the focus of digitalization was more on technologies such as DSP, RTB, and social advertising automation, with the concern being how to reach users more efficiently and accurately.

In contrast, implementing SAP and building enterprise API platforms are more internal processes that require consulting and delivery capabilities, including architecture design, system integration, process transformation, and security compliance, which are not common professional fields for advertising agencies.

At that time, Publicis' senior management believed internally that the value of creative and media services was declining, and if advertising could not be integrated into the core processes of enterprises, it would continue to be marginalized. In the future, if they could not play an irreplaceable role in the digital transformation of clients, they would only engage in "price wars" in the marketing chain.

In the past, advertising groups usually worked at the end of the "marketing chain," but Sapient allowed Publicis to first access clients' ERP and CRM systems and even participate in the overall channel strategic planning of enterprises.

This positioning increased Publicis' voice in clients' organizations and also enabled it to obtain a larger share in budget allocation - not simply relying on the CMO but also reaching the CIO, CTO, and even the CEO.

This also expanded Publicis' competitive boundaries beyond advertising groups such as Omnicom and WPP to directly face consulting giants such as Accenture and Deloitte.

In the year after the acquisition of Sapient, in 2015, driven by Sadoun, Publicis proposed "Power of One," whose core was to break the traditional matrix and serve clients in a client - centric manner, promoting integrated collaboration.

Looking back now, the greatest value of this deal might be that it allowed Publicis to complete a cognitive transformation six years ahead of time: advertising should go beyond the scope of "creative output" and become an integral part of "enterprise growth." This laid the foundation for subsequent acquisitions such as Epsilon, AI investments, and the layout of the e - commerce ecosystem.

In contrast, WPP's strategy at that time was more like "conservative patching."

After 2014, WPP was still optimizing traditional research businesses such as Kantar, focusing on "simplifying the agency structure and increasing profit margins." Although Mark Read did take some actions in technology investment after taking over, he mainly strengthened through internal incubation and small - scale acquisitions and failed to form assets of the same scale and integration depth as Sapient.

As a result, when the industry reached the inflection point from "creativity - driven" to "technology - driven," Publicis bet on the future, while WPP was fixing the past. This difference in rhythm ultimately evolved into a structural gap.

03 The Crucial Leap: Buying Epsilon for $4.4 Billion and Betting on First - Party Data

If Sapient allowed Publicis to enter the digital transformation track, then Epsilon helped it build a real moat in the field of data marketing.

In 2019, Publicis acquired Epsilon for $4.4 billion. This deal was not only large in amount (more than 35% of Publicis' market value at that time) but also because it was a bet on "first - party data," a seemingly dull but potentially decisive field for the future of advertising.

Why has first - party data become so crucial? The answer is actually simple: the cornerstone on which the advertising industry relies is collapsing.

For the past two decades, we have used third - party cookies to track users, piece together their behavior paths, and make advertising more and more precise. However, with the increasing strictness of privacy regulations such as GDPR and CCPA and Google's announcement to completely phase out cookies, the logic on which programmatic advertising depends has been fundamentally shaken.

The problem is that precision marketing will not disappear due to regulation. Brands still need to know: who are my users? Where are they? How should I spend my money next? In the past, the platform could provide the answer because it used cookies to track user behavior. But today, advertising platforms have closed their doors. If brands want to take control, the only way is through first - party data.

This is fundamentally different from third - party data. It is not "borrowed" from the platform but collected by the brand itself, including registration information, transaction records, membership points, and interaction habits. It naturally has three attributes: legality, stability, and irreplaceability. It is legal because users have given consent, stable because it does not rely on third - parties, and most importantly, it allows brands to have their own consumer relationships rather than being completely parasitic on the platform ecosystem.

For advertising holding companies, without first - party data, no matter how much AI - generated creativity there is, it will be difficult to find the right users; and without a unified cross - channel ID, it will be difficult to attribute brand marketing investments.

At that time, advertising agencies will always stay on the outer circle of creativity and media, and these two businesses are precisely the most vulnerable to price - cutting and the most likely to be replaced by AI. Whether they can help clients manage and activate first - party data determines whether advertising agencies still sit at the core of the marketing chain.

Epsilon is the "hard currency" of this era: it has a large first - party data asset, with CRM data on approximately 900 million consumers, covering consumption behavior, transaction habits, and loyalty systems. This means that Publicis can provide clients with "brand - owned + safe and compliant" data application solutions without overly relying on Google and Meta.

After the acquisition of Epsilon, Publicis' business landscape completely changed.

After the acquisition was completed, Publicis quickly integrated Epsilon's data capabilities into the "Power of One" system and launched the "Marcel Data Studio" internally, a real - time data insight platform for clients.

Through this platform, advertisers can see cross - channel marketing performance and receive automated optimization suggestions driven by AI. This ability directly competes with Meta's advertising platform logic, but the difference is that Publicis uses "independence, transparency, and client - first" as selling points, meeting the core needs of brands in the context of de - platformization and privacy protection.

This $4.4 - billion acquisition did put some pressure on Publicis in the early stage. In 2019 and 2020, Publicis lowered its profit expectations twice, and the capital market once doubted whether it had "overpaid."

However, since 2022, with the tightening of privacy policies and the increasing demand for data security from brands, the value of Epsilon has gradually emerged: it has not only helped Publicis win large clients such as Disney, Morgan Stanley, and Mondelez in the US market but has also become a killer selling point in bids for retail media and e - commerce advertising.

Since then, Publicis' digital revenue share has increased from less than 30% to more than 50% and reached 54% in the second quarter of 2024. Epsilon has not only improved Publicis' revenue structure but also changed its position in clients' budget allocation - it no longer relies on "winning accounts through pitch competitions" but locks in large - scale contracts for more than three years through long - term technology and data services.

Looking back now, this might be the most important and cost - effective acquisition in Publicis' history. It bought not just a company but the certainty of growth for the next decade.

While Publicis was making bold acquisitions, Mark Read, the then - CEO of WPP, took a different path:

While Publicis was actively merging and acquiring, WPP took another route: selling Kantar and getting back $3.1 billion to reduce debt.

This was a rational choice. In 2018, WPP had a high debt burden, so it was difficult for it to acquire a company.

Mark Read's logic was: go for a light - asset model and play the technology card through internal incubation and an open platform.

This is the key reason for the subsequent differentiation in the valuations of the two holding companies.

Publicis built a differentiated technological barrier with Epsilon, while WPP, although it launched "Choreograph" as a data and technology platform, lacked its own data assets and had to rely on client data and third - party cooperation, resulting in an incomplete product in terms of functionality and marketing.

Mark Read's attitude on this is quite representative. He publicly stated at an industry forum in 2019:

"Owning first - party data is not nirvana. What clients care about is whether they use data in marketing, not whether we own the data."

This statement sounds practical, but behind it is an overly conservative mindset. In fact, at this turning point, WPP completely underestimated the strategic value of first - party data, made a misjudgment that could rewrite the future, and closed the door on reshaping its competitiveness.