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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Adbrands Weekly Update 8th Feb 2018: Publicis Groupe got well ahead of the pack with 4Q results, released this morning. These showed a strong end to a recovery which had already begun to take hold mid-year. Organic growth of 2.2% in the final quarter was the best result from Publicis for three years or more, raising the full-year figure to 0.8%. The key factor was a surge in new business from the US, which delivered 4Q growth of 4.5% after a pretty dismal showing in the preceding three quarters. However, Europe slipped 1.8% in the final period. Publicis will need to keep an eye on its back yard in 2018. Performance within Europe varied enormously, with the UK up strongly at 5.5% for the year, France lacklustre on 1.1% while Germany reported a shock 6.9% decline. China was also a worry, with a 7.6% decline for the year. The Groupe also delivered a firm and convincing rebuttal of those anonymous allegations that it had fudged organic growth figures by prematurely applying new IFRS standards. For the full year, revenues were €9.69bn, down very slightly on 2016 as a result of currencies, while net income came in at €862m, a strong turnaround from 2016's impairment-generated €520m loss.

Separately, Publicis Groupe also made further changes to its divisional senior management roster this week. In perhaps the most notable change, Leo Burnett's top executive Rich Stoddart is to depart the group. No direct replacement was named. Instead chief creative officer Mark Tutssel assumes a new role as executive chairman. Stoddart's departure will be seen by many as further evidence of the gradual erosion of individual agency brands in favour of the larger Publicis Communications umbrella. At the same time, Nick Colucci moves from Publicis Health to become COO of Publicis Communications North America, working with regional CEO Andrew Bruce. That leaves Alexandra von Plato as sole global CEO of Publicis Health. Loris Nold, currently COO for Publicis Communications APAC & MEA was named as CEO for the APAC region.

Adbrands Weekly Update 1st Feb 2018: Publicis Groupe has called upon Microsoft to assist with creation of its enormously ambitious Marcel AI platform, set to launch in just four months' time. Though the system was originally conceived last summer as an inhouse project built by the group's Publicis.Sapient Consulting division, there has been growing speculation that it has proved more problematic than anticipated. Publicis.Sapient co-CEO Chip Register, who had been heading the project, resigned unexpectedly at the end of last year. Publicis.Sapient will continue to oversee the architecture and design of the platform, but Microsoft will now build it using its Azure AI and Office 365 platforms. "Microsoft have unparalleled resources, capabilities and expertise in artificial intelligence," said Publicis CEO Arthur Sadoun. "But we also chose Microsoft because they saw this as a true partnership, between two companies who have the same ambition: to radically change the way each of their industries work. It's this shared vision that will help turn Marcel into a real transformative force for our Groupe."

Adbrands Weekly Update 25th Jan 2018: Publicis issued a formal public announcement to deny allegations that it over-stated its organic growth figures during 2016 and 2017. An anonymous whistleblower has contacted the Groupe's auditors and selected financial analysts to accuse Publicis of applying new IFRS 15 accounting guidelines for reporting client income in advance of their scheduled introduction at the beginning of this year, thereby flattering historical organic growth. The Groupe refutes the allegations, which it said are intended "for the sole purpose of creating doubt and disturbing the reality of Publicis Groupe’s figures" and said it is investigating all possible legal options to address this "attempt at destabilisation". Results for 4Q 2017 are expected on Feb 8th.

Separately, in a bid to improve its generally patchy creative reputation, Publicis Groupe appointed its first ever group-wide chief creative officer, hiring R/GA's vice chairman & CCO Nick Law for the role. Law is also named as president of Publicis Communications, the division which houses all the Groupe's advertising and below-the-line units except digital and healthcare, and is tasked with developing a "unified creative ethos" across all brands under his command. He is expected to join Publicis in May, reporting directly to CEO Arthur Sadoun.

Adbrands Weekly Update 7th Dec 2017: Chip Register, currently co-CEO of Publicis.Sapient, and head of its Sapient Consulting division, is to leave the group at the end of this year to run a non-profit association he co-founded with his wife. Alan Wexler will become sole CEO of Publicis.Sapient. Register's unexpected departure is notable since only a few months ago he was the man tasked with over-seeing the creation of Publicis Groupe's Marcel AI platform, which is due for delivery in May. Publicis has pulled out of all self-promotional activities for the duration of Marcel's gestation, supposedly to free up funds for the project. Publicis said the Marcel platform will now be overseen by group general manager Veronique Weill and chief talent officer Emmanuel André.

Adbrands Weekly Update 19th Oct 2017: Publicis Groupe continues to improve after last year's worrying slump. Reported figures slipped to €2.26bn as a result of exchange rates, but the organic increase ex-currency ex-M&A was 1.2%. That's nowhere near Omnicom, but a marked improvement on Publicis's own last six sets of results. It lifted the YTD figure into positive territory at a modest 0.3%. In the latest quarter, there was negative growth in Europe and Asia Pacific (down 1.5% and 3.1% respectively) but that was offset by a strong rebound in North America, up 3.0%.

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