In this edition of Localogy’s Local Beats, we examine news and moves from Interpublic Group, Salesforce & OpenAI.
Interpublic Group Beefs Up
What Happened?
Advertising giant Interpublic Group this week acquired retail analytics company Intelligence Node for $100 million, according to the Wall Street Journal. The 120-person Intelligence Node was founded in 2012 and serves brands and retailers with data and insights on shopping trends. The idea is to empower those clients with a knowledge position that helps drive conversions. For example, things like clickstream analysis can reveal where carts are being abandoned and where the UX should be optimized. As retail analytics usually go, there’s also lots of data around things like pricing trends and competitive intelligence on other retailers’ promotions. Making rapid decisions based on this real-time intelligence is is the name of the game, especially in the holiday shopping season when deals change quickly and price-sensitive shoppers are savvierthan ever. Being quick on the draw is the difference between a conversion and an abandoned cart.
Why Does it Matter?
This deal is the latest in massive advertising holding companies beefing up. An acquisition like this has greater bang for the buck when it can power several assets that sit under a given ad giant like Interpublic Group. We’ve seen a similar M&A uptick from Publicis, as it seeks to empower all its brands and agencies with better ad tech. And in a softened market for consumer spending, it’s a zero-sum game. So acquisitions like this will continue to happen to gain that necessary edge.
Publicis Beefs Up its Attribution Play with Mars United Commerce
Agentforce Amps Up
What Happened? One of the early and logical places where AI is being integrated is to automate sales and tech support. Enter Agentforce, Salesforce’s latest big push. The platform will offer AI agents that automate various tasks like customer support. This week, Salesforce doubled down on this effort by announcing that it’s hiring 1,400 sales reps and account execs to blitz the market. Salesforce is known for its sales-heavy approach and culture… it’s right there in the title. So this move is on brand.
Why Does it Matter? In early days of AI’s enterprise adoption, market share will be a function of both technological competency and sales. Salesforce’s latest move is all about the latter, and in capturing some of the current buzz around AI. As operators continue to ask themselves how AI applies to their business and how they can avoid missing the boat, enterprise software players want to be there to answer that question. Salesforce has a natural edge here given its existing relationships from its core CRM, Marketing Cloud, and other enterprise touch points. Expect it to keep blitzing the enterprise market to grow its ARPU – and establish new customers – by waving the AI flag.
Street Fight Live: Searching for Meaning in a Post-GPT World
OpenAI Feels Out its Business Model
What Happened? One question continues to be asked about Open AI… and AI in general. What’s the business model? We’ve theorized in the past that it’s all about B2B2C. This will occur through AI models distributed via APIs and provisioned through SaaS licenses to help brands througout the land integrate customer-facing AI agents. That’s still the case, but Open AI is thinking bigger in terms of feeling out all its potential revenue streams. This week we saw it make two big moves in this direction. The first is its admission that it’s evaluating an ad-supported business model. This makes sense as there’s Google-like intent that’s inherent in ChatGPT queries. The second is a premium tier for ChatGPT that will reportedly cost about $200 per month and offer unlimited access to its models, including the full version of its o1 reasoning model. This move likewise makes sense to monetize power users with an all-you-can-eat plan. Expect both revenue models to develop and see the light of day.
Why Does it Matter? As the vanguard of AI, open AI’s moves to feel out and establish business models could be just that – a model for the rest of the market for the best ways to monetize AI. It has deep enough pockets to spend lots of time experimenting in the live market. In that sense, it could be the one that ends up with arrows in its back, while others can come along in a second wave, replicate its learnings, and avoid its mistakes. On the other side of that argument is a potential early mover advantage in grabbing more market share in early days for things like AI ad dollars. Altogether, this will raise the question once again whether it’s better to be an early mover or fast follower…
