And I would say that that’s still the case. It doesn’t feel like we are seeing meaningful upside there. And to Adrien’s question, we’ve not factored that into our thinking for ’24.
Operator: The next question is from Tim Nollen with Macquarie. You may go ahead.
Tim Nollen : Philippe, I’d just like to ask about some of the reorganizations that you’ve done, you’ve had some management turnover you’ve had some account losses but I’m focused actually on the data and media segment, and you mentioned KINESSO in your prepared remarks. Just wondering if you could help us understand how that data and media organization is more simplified, how it presumably should be better and help clients drive better returns on spending, hopefully win some more business. And relatedly, I think you mentioned also in your prepared remarks about focusing some M&A activity on scale and digital transformation activities. I wonder if that’s a particular call out or just — and if there’s anything more to add to that? Or if this is just kind of a standard thing that you would be investing in?
Philippe Krakowsky: That’s both good questions. I mean the KINESSO decision was sort of an evolution. I think you know us and have followed us long enough to know that post-Acxiom, we built engineering capability that allowed the data to be accessed by and put to use, again, by as many of our agencies as possible, concentration still being largely of our media business that then led to the creation of an addressable unit. And what we were observing there was just that there started to be a bit too much complexity. There were just too many places that you had to stop along the way to get that kind of work done. So, we have both recombined and integrated what was matter kind KINESSO reprise all of those units performance, kind of holistic, addressable and then the folks who build the tech that drives that into one unit.
We’ve also aligned that into Mediabrands. And as I mentioned, their performance was actually very strong last year, specifically called it out for the quarter. And it’s just meant just a more streamlined way to get all the way through that value chain. And we still have work to do to activate Acxiom across more of the group. So, I think that will also help because it’s likely that, that will become the tech node from which we do that for the entirety of IPG. And the second question you asked, I think, goes to when I look at or when we look at what we’ve run into with very, very — with premium digital agencies that are in the portfolio that for many years, we’re very, very strong performers is a sense that coming out of pandemic scale in that space matters and you’re sort of looking at where some of that business is going and the nature of how a lot of those RFPs come across.
And so, I think it’s an area we’re interested in and would have been interested regardless, but it’s definitely an area of particular focus at the moment.
Operator: The next question is from Steven Cahall with Wells Fargo. You may go ahead.
Steven Cahall : So, we’ve seen one of your peers that media has been strong and accelerating and creative has been softer. I think you’ve called out some similar trends with creative a bit softer and Mediabrands performing well. I’m just wondering, as you speak to clients, do you think that this change in the way that advertising is evolving means that brands are going to increasingly shift dollars into paid media and take dollars out of creative? Is that a long-term change to the industry? And if so, what does it mean for Interpublic? And then just to pick up on the margin topic. So, I think it was about eight years ago, every agency had to invest in capabilities like programmatic, and it did take some margin expansion out of the industry kind of until about the COVID era.
And I think now we’re seeing some of that in both media and AI. So how do you think about this investment cycle in terms of how long it might last before that longer-term margin expansion plan comes back? Thank you.
Philippe Krakowsky: That’s a lot in two very quick questions. So, I guess on the latter, I would say to you that, obviously, if you look at our margins four years ago today — five years ago today. So, I think that the AI piece, to begin with, it will likely be helpful from a margin perspective. But I think that you have to kind of unpack the spend. There’s been a lot of noise around who’s spending what or what those commitments are. And I’m not sure that even for the folks who put some numbers out there, it’s necessarily been apples-to-apples. But I think from where we sit, the investments across the group that would classify as AI-related are quite significant. So, if we look at ’24, I assume that, that number is $80 million range in berry.
And that is tech, software, including licenses and the partnerships, many of which I called out to you. And then development, which can happen in-house and then a great deal of training that is required. And so, AI has been a part of the business for many years, particularly data, on the media, sort of more tech-leaning offerings. So, the spend has been growing over time, and that ’24 number I throw out there is not all incremental, right? So, you think about the annual budgets we’ve got for tech, for development, for training portion of that now, an increased portion of that is going to be directed to AI. And as we rethink core components of our business, Ellen talks a lot about how we are kind of looking for more efficient processes. We’re going to basically, I think, fund that incremental spend internally.
