Winning a pitch often means losing money the moment the ink is dry on a contract.
Arthur Sadoun, the CEO of Publicis Groupe, gave insight into the process when briefing market analysts on September quarter results.
The France-based global advertising company posted 5.8% organic growth for the quarter, reporting continuing market share gains.
Sadoun, talking about the group’s new business, described a pitch win as “dilutive” rather than “accretive”.
“We have been number 1 in new business for the last five years now, so we had to onboard a lot of clients,” he told the analysts.
“And one recipe for success is not to wait for the contract to start to bring people on board.”
All the business won in the first half of 2024 will start sometime between the December quarter this year and March next.
“We have already started to staff,” he said. Part of that is moving the best of staff from the incumbent agency.
“There are people that can move from one place to another ... it's a very brutal business we are in, honestly.
“When you lose an account in the US, you might have to let go of hundreds of people.”
To ensure the best service for the client, Publicis invests ahead of revenue.
“Then we start to get paid, we are fully staffed,” he said.
Sadoun said there were two main reasons Publicis continued to take market share.
“Our new business track record has been particularly strong this summer and year-to-date, as confirmed by JPMorgan rankings,” he told the analysts.
“And number two, our ability to capture a disproportionate share of our client spend on personalisation at scale.
“Thanks to the unique combination of Epsilon leading proprietary data assets and Publicis media scale, these highly intertwined but complementary activities representing 50% of our revenue continued to grow this quarter at almost 10% together.”
The September quarter was also very busy on the M&A front with the acquisition of Influential, the world's largest influential marketing platform, and Mars United Commerce, the commerce marketing company.
“These investments of circa $1 billion not only brings to the group two unique assets in high-growth segments, it also further reinforces our model,” Sadoun said.
The media model is evolving with the rise of AI, the acceleration of personalisation at scale and with the two latest acquisitions.
“Brands now have three imperatives to succeed: Be across hundreds and thousands of media channels at the same time with custom content that fits every screen, show up less like an ad and more like a real conversation using influencers to recommend their brand as they reach now rival with some of the biggest publishers and keep up with the new shopping experiences online and off-line and pay-to-play to show up on the digital shelves at the speed of commerce.
“Marketers are now at risk of losing control on their client relationships and being unable to link their marketing investments to business outcomes.
“At Publicis, we have been solving that challenge by developing a connected media ecosystem.”
The two strategic acquisitions with Influential and Commerce will be a critical addition to Publicis’ go-to-market, he said.
He was confident that Publicis will continue to outperform the industry in the year to come.
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