Publicis Groupe (France)

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Publicis Groupe has forced its way into the top ranks of the world's leading marketing organisations through a string of canny and transformational acquisitions. Having learned painful lessons from a disastrous alliance with FCB during the 1990s, CEO Maurice Levy's acquisition of Saatchi & Saatchi in 2000 proved far more harmonious. Even more impressive was the agreed takeover of Leo Burnett two years later. Other jewels in the Publicis crown include multi-hub creative networks Bartle Bogle Hegarty, wholly owned since 2012, and Fallon. After a shaky start, Publicis has shown itself to be a worthy rival to established giants WPP and Omnicom. The group is especially strong in digital marketing. It acquired US-based Digitas in 2006, and broadened that network's footprint significantly. A deal to acquire rival digital agency Razorfish in 2009 allowed Publicis to overtake Interpublic as the world's third largest marketing services group. A series of further small and medium-sized acquisitions followed between 2010 and 2012, capped in 2013 by what was intended to be CEO Maurice Levy's crowning glory, a transformational deal whereby Publicis and larger rival Omnicom would merge to create the world's #1 marketing services giant. Despite securing most regulatory approvals, the deal eventually foundered on disagreements over the final structure of a combined group and was called off in May 2014. Instead, Levy unveiled a new deal a few months later with an agreement to acquire digital group Sapient for $3.7bn. However, the group's performance has remained under-par since the collapse of that Omincom deal, prompting a mammoth structural reorganisation during 2016. Now it falls to Levy's successor as CEO, former creative chief Arthur Sadoun, to restore Publicis to solid growth.

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Publicis Worldwide
Leo Burnett
Saatchi & Saatchi
Starcom MediaVest
Publicis Healthcare
Beacon Communications

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Recent stories from Adbrands Weekly Update:

Adbrands Weekly Update 18th May 2017: With all the marketing groups' results now in, here's the final ranking for organic growth for 1Q 2017. MDC Partners leads with 5.6% followed by Omnicom (4.4%), Dentsu (3.9%), Interpublic (2.7%), WPP (net sales 0.8%, revenues 0.2%), Havas (0.1%) and Publicis (negative 1.2%).

Adbrands Weekly Update 20th Apr 2017: Despite a flurry of new business gains since the start of the year, Publicis Groupe results out this morning demonstrate that there is no quick fix to the group's woes. The French giant delivered a second consecutive quarter of negative growth, with revenues down 1.2% on an organic basis to E2.33bn. Outgoing CEO Maurice Levy detected "faint but encouraging signals as to the Groupe's situation" but warned of a further though less marked decline for the current quarter. Publicis has delivered the worst performance of any of the five major Western groups, in terms of organic growth, for every one of the past eight quarters. No other group has reported negative growth. At the heart of Publicis' problems lies North America, the group's biggest region by far, but which reported negative organic growth of 5.0% for Q1. All other regions were positive, including 5.5% growth in its heartland of Europe. France alone jumped almost 12% and the UK by over 9%.

Adbrands Weekly Update 20th Apr 2017: Agathe Bousquet is leaving Havas after more than 15 years, including four as president of cornerstone creative agency Havas Paris. She has been lured by arch-rival Publicis Groupe to take on the immensely prestigious role of country president for France, overseeing all the group's domestic creative, media, digital and healthcare operations.

Adbrands Weekly Update 9th Mar 2017: With all the marketing groups' results now in, here's the final ranking for organic growth for 4Q and full year 2016. The full year ranking is led by Dentsu (5.1%), followed by Interpublic (5.0%), Omnicom (3.5%), Havas (3.1%), WPP (net sales 3.1%, revenues 3.0%), MDC Partners (2.3%) and Publicis (negative 0.7%). The table for 4Q alone is topped by Interpublic (5.1%), ahead of Havas (4.2%), Dentsu (3.9%), MDC Partners (3.8%), Omnicom (3.6%), WPP (net sales 2.1% revenues 0.5%) and Publicis (negative 2.5%).

Adbrands Weekly Update 9th February 2017: Publicis Groupe's annual results announcement this morning contained, as usual, lots of grandiose self-descriptions like "exceptional strength" and "unique business model". However, it also contained a shock E527m loss for the year and a grim organic decline of 2.5% for the quarter. The latter figure was led by a horrendous 6.9% organic decline in North America and a 5.5% fall across developing markets. (Europe was up 5.1%). Despite all Maurice Levy's big promises over the past two years, this was a bad set of results. Most of the blame was pointed at weak performance Razorfish, but it's hard to believe that this alone was responsible for the whopping E1.4bn impairment charge taken against the whole Publicis Sapient digital division. A large part must surely come from the excessive $3.7bn Levy was prepared to pay for Sapient, which has yet to ignite group performance as promised. Publicis' full year revenues rose to E9.73bn (or around $10.8bn), a 3% increased on a reported basis but down 0.7% organic. It wasn't all bad news: stripping out the non-cash impairment, headline net income edged up 2% to just over E1.0bn, and this week also saw two major business gains by Publicis Media. However, it's quite clear that Arthur Sadoun has quite a task ahead of him to turn this ship around.

There was some compensation from two big media wins. Molson Coors wrapped up a global review of media, awarding the biggest prize to Publicis Groupe. Its MillerCoors division in the US, now wholly owned following the break-up of SABMiller, appointed a new dedicated unit of Publicis Media to manage the business, previously housed at Initiative. That marks a major gain for Publicis and an equally significant loss for Initiative, worth in excess of $400m in billings. Connect at Publicis Media will be headed by Americas CEO Tim Jones, and will be headquartered in Chicago. However, WPP's Kinetic will continue to oversee out-of-home media, while MEC was reappointed for Molson Coors Canada. In the UK, Publicis-owned Zenith was reappointed to the local business. Separately, it was also reported that the Groupe has captured Mattel's US media account, to be shared between MediaVest Spark and DigitasLBi. MediaVest had already held planning duties; buying moves from Mindshare.

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