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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Adbrands Weekly Update 20th Jul 2017: "Encouraging" is how new Publicis Groupe CEO Arthur Sadoun described his first set of results for 2Q and the half year. Organic growth was at least positive for the first time in three quarters, with a lift of 0.8% for the quarter to E2.5bn. (The reported gain including the benefits of currencies and acquisitions was 2.2%). However, it wasn't enough to offset the poor performance from 1Q, leaving the group still in the red for the first six months of 2017 at negative 0.2%. North America - which accounts for more than half of revenues - remains a problem, with organic growth of just 0.2% for 2Q, compared to a comfortable 3.2% in Europe and 2.8% in Latin America. Asia Pacific is still strongly negative at -3.3%. Publicis doesn't report quarterly profits, but income for the half year net was E387m, up 1.6% on the year-ago.
Adbrands Weekly Update 22nd Jun 2017: There were further changes at Publicis Groupe as new CEO Arthur Sadoun took additional steps to strengthen his core team. Carla Serrano transfers from Publicis New York, where she was CEO, to become group chief strategy officer, while former JP Morgan exec and current Axa marketing chief Veronique Weill has been recruited for the role of group general manager, overseeing the centralised back office division Re:Sources as well as other areas such as real estate and M&A. Serrano takes up her new role immediately; Weill joins in September.
However, the biggest development at Publicis was the announcement that its agencies will suspend all paid-for promotional marketing, including participation in any festivals or awards shows anywhere in the world, for a whole year to work on the development of a new group-wide AI platform, to be named Marcel. "Marcel will be the first-ever professional assistant platform powered by artificial intelligence and machine learning, that connects 80,000 employees across 200 disciplines in 130 countries," said the group. "Marcel draws on the predictive nature of AI to identify opportunities, anticipate clients’ needs, connect people, and unleash creativity while harnessing the power of the Groupe’s data spine to drive business solutions." "This is big and scary," said CEO Arthur Sadoun. "We're profiling in detail all our people. We'll know not only what they do today but what they'll want to do tomorrow. It's how our young people want to work. And we are the only group that can do this." So now Big Brother has a name and its name is Marcel. One CEO of a rival network, who didn't wish to be identified, told the WSJ's CMO Today column, "It's basically a glorified database to get people to work harder." The system is being developed by the Groupe's own Sapient consulting division. It's not quite clear how account managers or creative directors at Saatchi & Saatchi or Leo Burnett entering awards shows would get in the way of building an internal IT system, but presumably this is mainly another way of saving costs. Industry rumour suggests that the awards ban came as a shock to staff, who get an enormous morale boost from the glory of accounts wins, not to mention the fun of all the industry parties. Expect any Publicis employees to make the very most of the rest of the Cannes Lions Festival - it's their last day out for the next 12 months!
Adbrands Weekly Update 5th Jun 2017: It's a big week for Publicis Groupe: Arthur Sadoun officially took over from Maurice Levy as CEO, and to mark his accession to the role issued a video address to all employees (and interested third parties). The message was designed to rally the troops for the challenges ahead. Like Levy's traditional annual Christmas messages of previous years, it showcased Sadoun's informal style and relaxed demeanour but also allowed him to set out his stall for the future. Despite his thick French accent, the speech was fluent and assured, promising that Publicis has a unique ability to transform clients' business, vowing to further increase integration of its various services for clients, and calling on staff to change cultural habits to create an "agile, flat, modular, dynamic organization that will create new value not only for our clients but for everyone in our group, in the push for greater flexibility and collaboration." Though he steps down from an executive role, Levy will retain close links with Publicis as chairman of its supervisory board.
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%.
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