Publicis Groupe global CEO Arthur Sadoun sounded an optimistic note in his first full year results as top boss, but signalled he believes the industry is in for another wave of the so called ‘mediapalooza’.
Over the past two years, since concerns over transparency reached fever pitch, many of the world's largest advertisers called reviews of their media accounts. Howver, Sadoun thinks he's shored up the future of Publicis with a structural transformation combining data, content and technology that make it a “leader in marketing and business transformation and will shore up its future success amid the upheaval.
“Our industry has been affected by several events over the past few years such as the mediapalooza, the ANA investigation which undermined trust and confidence in the sector, digital disruption which has caused strong pressures from advertisers, and the deep changes in the way the Groupe operates brought on by technology and data,” he said in the Q4 results statement.
“To deal with these relational and economic upheavals, the Groupe has undertaken a company-wide restructuring and has strengthened its assets in technology, data and its talents, in order to best position the Groupe for the future. While the objectives set in 2013 need to be revisited, short term trends are encouraging.
“Despite a generally difficult context and the Groupe being in the midst of its own transformation, the quality of our results demonstrates Publicis Groupe’s strength and our ability to adapt to the deep changes affecting our industry. The Groupe is stronger than it was a year ago.”
The group reported a 2.2% rise in organic revenue for the final quarter of the year to €2.6 billion (AUS$4bn), and 0.8% rise for the full year to EURO €9.6 billion (Aus$15bn).
Its profit reached €862 million (Aus$1.3bn), up from a loss of €527 million (Aus$830m) the previous year.
In APAC organic revenue fell 2.3% compared with last year, to €1.1 billion (Aus$1.7bn).
The group also outlined that it has saved substantially on its staffing and freelance costs which it says comes from “better management” of its resources under its Power of One structure.
The restructuring cost around the Power of One initiative, which aims to bring the group’s agencies and arms into closer alignment, rose to €120 million (Aus$188m), up from €73 million (Aus$114m) in the previous year.
Last year was a departure for the agency, which under Sadoun, vowed to skip all global and local awards shows for the 12 months following Cannes Lions 2017 as part of a costs cutting measure. Instead it said it would use the money usually invested in awards and sponsorships to build a giant artificial intelligence programme that it believes will underpin its future.
The AI platform is named Marcel after the group’s original founder Marcel Bleustein-Blanchet. Just last week the group announced that it had enlisted Microsoft to help build it, suggesting that it’s unlikely to be on track for a June launch.
“In an industry that is experiencing a fundamental upheaval, we need to further demonstrate the singularity of our model and why we are ideally positioned to partner our clients. In recent months, we reached several milestones in our transformation process,” the CEO says.
Sadoun says new business wins and recent hires show that the group’s “future proofing” strategy is working.
Over the past year Publicis has won business from P&G UK, Lionsgate, Southwest Airlines, L'Oréal, McDonald’s and European supermarket Carrefour. In AUstralia it has won/retained 20th Century Fox, Ego, Southern Cross Travel Insurance, Danks Hardware and Snooze.
Sadoun says the group’s recent hire of Australian export Nick Law from R/GA as chief creative officer demonstrates Publicis Group’s “on-going commitment to creativity and technology at the service of marketing and business transformation”. He described Law as “one of the industry’s most progressive creative leaders”.
While buoyant in his company’s results, Sadoun also signalled that there is more to be done.
“These early results are encouraging but there is still a lot to do. We now have solid foundations from which to build in 2018 to help our clients take on the essential challenges ahead.”
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