Internal memo explains why ad holding company IPG launched app-focused martech business Kinesso
- Ad holding company IPG launched a new business called Kinesso.
- Kinesso's goal is to build apps and software products for clients to help them create, target, and measure ad campaigns with data.
- In an internal memo, IPG Chairman and CEO Michael Roth called the move an attempt to build on IPG's $2.3 billion acquisition of most of data giant Acxiom.
- One year after the acquisition, IPG credits the Acxiom with new business wins. But some industry observers remain skeptical, noting that the company does not own this first-party consumer data.
- Click here for more BI Prime stories.
Today IPG, the fourth-largest ad industry holding company, announced the creation of a standalone business called Kinesso, which the company claims will create software as a service products for clients.
In an internal memo acquired by Business Insider and printed in full below, IPG Chairman and CEO Michael Roth wrote that Kinesso will "build software products" and apps to help clients better target and measure their ad campaigns through the use of consumer data.
The new business will consist of IPG's ad-tech division Cadreon, as well as its Data and Technology unit. It will primarily collaborate with IPG Mediabrands, the network that includes all of the holding company's media buying agencies.
According to a press release that went live this morning before Roth's memo, Kinesso will also comply with privacy legislation. Arun Kumar, former Cadreon president who is IPG's chief data & marketing technology officer, will double as CEO of Kinesso.
The news is a significant attempt to build upon IPG's 2018 acquisition of Acxiom Marketing Solutions, the data-marketing division of Acxiom, for $2.3 billion, for its so-called first-party consumer data.
While IPG claims that the acquisition has led directly to new business wins, some observers remain skeptical. One agency executive emphasized that IPG does not own the data involved in Acxiom, which compiles information marketers draw directly from their own customers. Sir Martin Sorrell of S4 Capital recently claimed that IPG plans to "cut off access to the Acxiom data to competitors" to get an advantage in the market. The company later called that statement inaccurate.
Forrester chief analyst Jay Pattisal called the launch of Kinesso a "creative leap" and said it could improve IPG's software and tech capabilities.
An IPG spokesperson referred Business Insider to the press release.
Here's the full memo: