Publicis just laid down the gauntlet on the ad industry by pledging to invest more than $300 million in AI

Starting in the first half of this year, all Publicis employees will begin to access trillions of data points through its forthcoming CoreAI platform — including 2.3 billion profiles of consumers, historical information about advertising and business performance, as well as proprietary creative and coding assets.

Work that took weeks will take seconds, according to Publicis

CoreAI users can type commands into a generative AI interface that’s plugged into other cloud computing, platforms and AI models, such as those provided by Microsoft Azure OpenAI, Eleven Labs, and Stable Diffusion.

Publicis said that work that used to take weeks — like drawing up a media plan, and identifying industry trends and competitor moves to quickly optimize the campaign — could take just seconds using CoreAI.

CoreAI can also help quickly spin up thousands of ads personalized to different consumers, simplify tedious back office tasks, and allow Publicis to deploy new software faster than before, the company said.

Publicis’ billion-dollar acquisitions made its AI tool possible

Publicis’ acquisition strategy put it in a position to leapfrog ad holding company rivals, its execs said. It bought first-party data platform Epsilon in a $4.4 billion 2019 acquisition. And its $3.7 billion 2014 acquisition of digital marketing company Sapient brought tens of thousands of IT engineers and data experts in-house.

Meanwhile some rival agency groups, like WPP and Havas, opted to license firsty-party data from other companies rather than making multibillion dollar acquisitions to own the data outright.

“We’re in such a fantastic position to leverage AI better than our competition,” said Carla Serrano, Publicis Groupe global chief strategy officer in an interview.

“There’s no such thing as AI without great data and we have connected, proprietary data, and we’re a platform company,” she added.

Publicis is racing to maintain momentum after a strong year

Publicis’s swagger-heavy AI presentation was punctuated by its 2023 performance. The company said Thursday it posted organic revenue growth — a closely watched industry metric that excludes acquisitions and currency effects — of 6.3% last year, outpacing its rivals for the fourth year in a row. Its 18% profit margin is also expected to be ahead of the industry this year.

Publicis said it plans to invest 100 million euros, around $109 million, in building the AI platform in 2024. Half of that would go towards hiring and upskilling current staffers, while the other would be deployed into technology like software licenses and cloud infrastructure.

The company said the investment will be “fully funded by internal efficiencies” and not dilute its operating margin in 2024 — and by 2025 its efforts would be accretive to the margin.

Publicis explains why its bet on AI won’t result in layoffs

As Google recently demonstrated, the pivot to AI has been coupled with thousands of job losses at some big tech companies.

Serrano said Publicis’ strategy is about “supercharging people, and not about cutting people” and that AI will be seen as a “mega tool” for talented creative staffers.

“Tech companies overhired. We couldn’t afford to overhire. I don’t have a ton of people that are literally doing nothing,” Serrano said.

Ad companies will also need to figure out how to balance productivity gains with how they charge their clients. Agencies typically charge on a “full-time equivalent,” or FTE model, based on the number of hours, equivalent to full-time employees, they spent working on a client’s business. And major clients too are experimenting with how they can use readily available AI tools to cut costs at their businesses.

“Planning and buying within media agencies is about 85% to 95% of the cost and that’s the most vulnerable to AI,” said Michael Farmer, Michael Farmer, a marketing consultant and author of the book “Madison Avenue Makeover” in a 2023 interview with Business Insider. “I believe much of that busy work can be handled by AI.”

Publicis is already starting to shift many of its biggest accounts to a consultancy-like or software-like models, and to agreements where its agencies are compensated on performance, Serrano said.