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 slumped dramatically following the collapse of the Omnicom deal, prompting a mammoth structural reorganisation during 2016. It fell to Levy's successor as CEO, former creative chief Arthur Sadoun, to restore Publicis to solid growth. That has been a slow process, but there was finally a return to consistent positive uplift during 2018. In 2019, though, Publicis announced its biggest ever acquisition, agreeing to pay $3.95bn for US data and CRM giant Epsilon.
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Adbrands Daily Update 19th Jul 2019: Publicis narrowly scraped into positive growth in 2Q, with an organic uplift of just 0.1% after two consecutive quarters of negative results. Revenues came in at €2.2bn. Europe was solid at 2.4%, while Asia Pacific contributed 2.7%. However, Publicis is still struggling in North America - down -1.7% - while Latin America slumped -8.7%. CEO Arthur Sadoun said "our progress has been slowed down by the ongoing fee reduction on traditional advertising that continued to impact our overall US operations". That is encouraging further consolidation of local operations under a single country head. "Where it is the most advanced," he said, "this model is already working very well. This is the case in the UK and France, with net revenue in H1 growing by 4.8% and 3.1% respectively." Net income for the half year (Publicis doesn't repoort quarterly profit) was €345m, up almost 15%.
Adbrands Daily Update 11th Jul 2019: Another milestone in the slow motion merger of Publicis Groupe agency brands was announced today. Most of the main agencies under the Publicis Communications banner in the US are being divided into three regional businesses, East, West and Center, each with their own CEO. Individual brands will remain for the time being, but the new structure seems to ensure their ultimate elimination. Publicis Communications West will comprise Saatchi & Saatchi's offices in Los Angeles and Dallas, as well as Team One, Conill, Publicis Seattle and Publicis Hawkeye in Dallas. Andrew Bruce, also CEO of Publicis Communications North America, will lead that division. Publicis Communications East covers the main Publicis and Saatchi & Saatchi outposts in New York as well as dedicated unit P&G One. Also digital shop Rokkan and the Saatchi X shopper agency. Jem Ripley, a former senior executive of SapientRazorfish, was named as CEO, and will also oversee digital business PublicisSapient. Leo Burnett will be the core business within Publicis Communications Center, alongside Arc, Fallon, Martin Retail Group and Turner Duckworth. Burnett's current North America CEO Andrew Swinand remains CEO.
Adbrands Daily Update 25th Jun 2019: Nick Law, poached from R/GA only 18 months ago to be Publicis Groupe's global chief creative officer and president of Publicis Communications, is leaving in September to take a newly created role at Apple as VP, marcom integration, reporting to former Grey creative chief Tor Myhren, now Apple's VP, marketing communications. "This was a very hard decision for me," Law told his Publicis colleagues. "Not only have I enjoyed my time at Publicis, I've been energised by the ambition and relentless transformation of the Groupe... I wish I could continue to be a part of the journey - but the once in a lifetime opportunity to work with a brand I've admired my whole life was too good to ignore."
Adbrands Daily Update 15th May 2019: With all results now in, Interpublic was clear champion of 1Q with 6.4% organic growth, followed by Omnicom at 2.5% and Havas at 0.1%. MDC was negative -0.9%, ahead of Dentsu at -1.6%, Publicis at -1.8% and WPP at -2.8%.
Adbrands Daily Update 15th Apr 2019: Publicis Groupe announced its biggest ever acquisition: US-based data and CRM giant Epsilon. The French group has agreed to pay a whopping $3.95bn for the business, almost twice Epsilon's annual revenues last year, and almost half Publicis's own income. It's not just the biggest-ever acquisition by Publicis but also the second biggest in the advertising industry (after Dentsu-Aegis). Epsilon controls a huge database of demographic and contact information, behavioural, transactional, online and offline data. This is an exceptionally bold move by Publicis and further cements that group's shift away from traditional creativity towards data-driven marketing. The group also agreed a strategic alliance with Epsilon's vendor Alliance Data, which continues to operate credit card processing and loyalty card services for third-party clients. Publicis CEO Arthur Sadoun called it "a one-time opportunity" to make the group a "leader in this data-led, digital-first world". Epsilon will operate as a separate group-wide entity, parallel with Publicis.Sapient. It will continue to be led by current CEO Bryan Kennedy. The deal coincided with another set of weak financials for 1Q. Publicis reported an organic decline of 1.8% to reported revenues of €2.1bn. The Americas fared worst, with North America down by a shock 4.6% and Latin America by 6.3%. That offset decent though hardly exceptional growth in Europe (0.8%) and Asia (1.2%). Individual markets that did well included India (9.3%), the UK (5.1%) and France (4.2%), but Germany plunged by over 10%. The big challenge facing Publicis in the year ahead will be to process its huge new acquisition without distracting management and existing agencies from turning around new business performance.
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