Publicis’s SapientRazorfish is linking up its Cosmos data product to Microsoft’s cloud, Azure
By ALEXANDRA BRUELL
March 22, 2017 12:00 p.m. ET
Publicis Groupe and Microsoft Corp. have decided to expand a pilot initiative that combined the ad giant’s Cosmos data product with Microsoft’s Azure cloud service. The partnership highlights Publicis’s push to generate more revenue from intellectual property and compete with consulting companies, as well as Microsoft’s ambitions to expand its cloud-based offerings.
Cosmos gleans people’s behavioral data for marketers and constantly updates individual customer identities that are stored in the Microsoft cloud. The marketer uses that customer information to create and send targeted emails and digital ads to individuals.
“How customers behave in real time changes how we market to them,” said Shannon Denton, chief strategy officer of Publicis digital agency group SapientRazorfish. “When we’re competing with other agencies but also with consultancies, this data is a huge advantage. That’s the big play and why we’re going to continue to invest in this area.”
The partnership comes as marketers rethink how they target their customers and attempt to piece together previously disparate marketing functions, such as customer relationship marketing and ad-buying, and make more effective use of customer data.
It’s also a potentially lucrative play for the agency and other Publicis shops that now will have access to Cosmos and Azure.
SapientRazorfish is charging clients a licensing fee for use of Cosmos. It’s also collecting a small percentage of the usage fee a client pays Microsoft when it uses Cosmos and Azure to host and update its customer data. Additionally, Publicis agencies may also generate service fees for supporting the client’s marketing.
The goal for the agency group is for 5% to 10% of its revenue to come from intellectual property, through products like Cosmos, said Mr. Denton. Typically, agencies generate under 1% of their revenue from IP, he said.
Licensing intellectual property is a departure from the common agency services model in which an agency sells strategy, design work and even digital product development for individual marketers. “We’re taking a fresh look at [our IP] and making sure we’re going after it more aggressively across the whole organization,” he said. “It’s a competitive market. We need to differentiate and find new revenue sources.”
The partnership also offers insight into Microsoft’s strategy to build out its cloud-based offerings and compete with companies like IBM, which has been aggressively promoting its artificial intelligence product Watson.
The partnership with Publicis is “one of the biggest bets we’re making” in the enterprise transformation space, said Joseph Sirosh, corporate vice president of the data group at Microsoft. “Marketing is an area where our customers want to get as much insight as possible and use predictive analytics and artificial intelligence and all the rich data from sensors and all the customer behavior,” he said. “Cosmos is very much a reflection of the core capability we’re bringing into the cloud.”
SapientRazorfish’s Mr. Denton describes a scenario in which a cosmetics company might use Cosmos and Azure to glean data from customers who use its app. From the app, which shows customers how makeup shades might look like on their face, Cosmos is able to create customer profiles that include data about chosen products and skin tones, as well as other customer information the agency can plug in, such as data from client loyalty programs or behavioral or purchase data from the agency’s third-party email vendors. That data is stored in the cloud.
The agency and marketer can then use that information to recommend products before or after a client purchase. The agency works with companies like Adobe that can help it use the data in the cloud to serve digital ads and promotional materials recommending specific products to the targeted customers and other customers with similar traits. Microsoft Azure also has a partnership with Adobe.
The Publicis and Microsoft relationship dates back nearly a decade. Publicis acquired Razorfish from Microsoft in 2009, for about $530 million. The deal included a multi-year commitment from Publicis to spend a certain amount with Microsoft in exchange for specific ad rates.
“There’s been a history there,” said Mr. Denton.
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