Publicis Groupe, winning market share and leading the global advertising group revenue increase league table, sees 5% as a baseline for growth.
The Paris-based global advertising group also is going for growth via acquisitions, with a number of negotiations at an advanced stage.
Publicis reported stronger than expected net revenue organic growth, with the June quarter lifting 5.6% to 3.458 billion Euros.
And the company upgraded its 2024 net revenue organic growth forecast to 5%-6%, from 4% to 5%.
Publicis said it continues to win market share, outperforming peers by close to 400 basis points (4 percentage points) on average in the June quarter.
“We are not immune to the macro picture clearly but we are winning market share and that is what makes a difference in this challenging environment,” CEO Arthur Sadoun told market analysts in a briefing.
For example, in China, where competitors were in negative territory, Publicis was growing at double digitas, he said.
The company, he said, has been growing close to twice as fast as its peers since 2020, with an organic growth of plus 4.7% a year versus industry at plus 2.9%.
While Publicis doesn’t disclose the state of accounts, Sadoun said statistics collated by third parties show new business wins close to three times as much as the second best.
“At a time where the micro economic landscape is dominated by ongoing conflict, political uncertainty and high interest rates, and when the IT sector and some of our peers are facing difficulties, we have the potential to accelerate in the second half of the year,” Sadoun said
Since 2017, Publicis has made strategic bets to shift from a communication partner to a transformation partner.
“We invested over 9 billion euros in data and technology, notably through the acquisition of Sapient and Epsilon.
“We broke down the silo of organisation through the country model and the power of one to seamlessly connect our data, creative media and technology capabilities. And we created Marcel to transform our culture and embark our people on our transformation.”
Sadoun sees 5% organic growth as a rock solid new floor.
“Our unique revenue mix continues to show its strengths,” he said.
“The combination of Epsilon and media, representing 50% of our revenue, remained strongly accretive to our performance with double digit organic growth in Q2.
“It will continue to allow us to strengthen our relationship with existing clients and win the trust of new ones. It has positioned us at the top of new business ranking for the last five years.
“Since 2019, we have won over $US14 billion of new media billings, more than twice as much as our closest competitors.
“We maintain this momentum in 2024. In the first six months of the year, Publicis was ranked number one in your business with billing of $3 billion close to three times as much as the second best performer.”
The current pipeline for acquisitions is strong with a number of advanced negotiations, Sadoun said.
“This means we will accelerate our investment in h2 and deliver on our objective of the 700 to 800 million euros worth of acquisition for 2024 in line with our capital allocation plan,” he said.
He said the opportunity to connect data and media is delivering a lot of growth and market share in a material way.
“The next big thing is definitely to connect data with content.
“Where are we on this? First, we definitely already have the leading capabilities. We don't need a big acquisition to do that. We are doing it. I think we might be number one in terms of size today. And we have that already in house working for many clients.
“We don't disclose any new business pitches but we have been winning a lot of production pitches for big clients . We are starting to put the backbone together.
“It's all about talent. And we are building what I think would be the best team in the industry, we already have great talent in place.
“But what is interesting here is that we are shifting from traditional production as I knew it when I was in charge of creative agencies, to something that is way more around tech and personalisation.
“And the kind of talent you need for tomorrow's production are not even the ones that we needed yesterday.
“So we have to be very, very thorough on how we pick up people for the next step.”
A slide from the presentation to analysts:
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