Dive Brief:

• Interpublic Group (IPG) created a marketing technology company called Kinesso that aims to improve ad targeting with consumer data from Acxiom Marketing Solutions, which was acquired last year for $2.3 billion. The ad holding giant named Arun Kumar as CEO of Kinesso, adding to his duties as chief data and technology officer at IPG.
• Kinesso is made up of IPG's ad-tech unit Cadreon, which will maintain its independence as a brand, and the holding company's data and technology group. Kinesso's Marketing Intelligence Engine consists of a connected group of applications that aim to improve consumer engagement with advertising. Kinesso's services include consulting and omnichannel addressable media activation, per the announcement.​
• Kinesso will rely on Acxiom data along with 16 other suppliers of information, AdExchanger reported. Kinesso now operates in the U.S., Canada, U.K., Ireland and Australia, and by next year will extend its reach among 1,400 employees in more than 70 markets, the announcement said.

Dive Insight:

IPG's creation of Kinesso is the latest step in the ad holding company's effort to harness consumer data to improve the effectiveness of marketing campaigns and capture more ad spend. As traditional ad agencies face growing competition from consulting firms and a trend toward in-housing of marketing services, Kinesso may help IPG's stable of agency brands — which include FCB, McCann and MullenLowe ​— to expand services and fend off rivals. Specifically, Kinesso has the potential to more seamlessly integrate data-driven insights in a way that informs marketing creative, something that remains a challenge as traditional agencies ramp up their investment in data, according to a recent Forrester report.

"This move gives IPG the opportunity to power both media and creative with technology and data-driven solutions that use Acxiom as the data management layer and Kinesso as the software layer to connect insight to execution," Jay Pattisall, a principal analyst at Forrester Research, said in a blog post about the formation of the new martech company. While precision targeting of marketing messages is important, IPG can't forget the importance of brand persuasion that comes from compelling ad creative, he said.

IPG isn't alone in developing data-driven marketing services for advertisers, as agencies have invested more than $12 billion on technology and databases since 2014 to meet CMOs' need for data-driven performance, Forrester said in the earlier report. Those deals include Publicis' $3.7 billion purchase of Sapient in 2014 and Epsilon for $4.4 billion this year, and Dentsu's $1.5 billion deal for Merkle in 2016.

Data-driven marketing strategies aim to personalize messaging while also operating at a massive scale, and to provide better measurement of key performance indicators (KPIs) like return on investment for advertisers. However, privacy also has become a significant political issue in regions such as the European Union, which last year enacted tighter restrictions on data sharing. Marketers must ensure they comply with those rules to avoid possible fines and other legal remedies.