The first half of the year has been strong for Publicis Groupe. The French advertising network recorded 7.1% organic growth for H1. Arthur Sadoun, chairman and CEO of Publicis Groupe, in a press note said, “In Q2, we continue to outperform the market on organic growth thanks to our unique revenue mix and new business track record.”
He further explained, “As we shifted from a communication to a transformation partner for our clients, we are confirming that we have become a stronger company since 2019 with our net revenue up +45% on a reported basis and our operating margin up +68% over this period.”
The group has been growing its data and artificial intelligence offerings over the past six years. “With our investments in Epsilon, powering Creative and Media through personalization at scale, Sapient and Marcel, we are uniquely positioned to lead the future of our industry. It will inevitably be shaped by data, tech and AI that are already at the heart of our business model both in how we work for our clients and in the way we operate,” added Sadoun.
The company expects to deliver organic growth at circa +5% for 2023, above our 3Y CAGR of +4%, with operating margin rate close to 18%.
Big bets on AI
Earlier this year, WPP, Publicis Groupe’s rival ad network, partnered with NVIDIA to build generative AI-enabled a content engine for its digital advertising services.
On the other hand, Publicis Groupe has been experimenting with AI-enabled services for a few years now. The company claims that its AI services, which include integrating technology within Sapient and Epsilon followed by the development of in-house platform Marcel has brought in major business deals. This includes the likes of Pfizer, Disney, Walmart, LVMH and Stellantis in the last year.
In an interview with Adweek, Jensen Huang, co-founder, president and CEO of tech company Nvidia, recently said, “WPP is going to unquestionably become an AI company.” When Adweek asked Sadoun about Publicis Groupe’s AI plans, he candidly said, “The big difference with our clients is that they don’t want to become an AI company. No one wants to become an AI company.”
He further added that the clients wanted to know how AI could help them link their media investments with business outcomes. This is followed by how AI could help them with the use of new media formats like Connect TV (CTV) and retail media.
Mergers and acquisitions
There were speculations and reports that French media company Vivendi, the owner of another rival agency Havas, could push for a tie-up with or takeover of Publicis Groupe.
Sadoun in an interview with Adweek said that independence is part of their DNA. According to Sadoun, after having sealed several deals during H1 and in the past Publicis has a M&A strategy of its own.
Adding London-based marketing technology company Yieldify; Bulgarian performance marketing business Advertise BG, U.S; ecommerce platform Corra and a full stake in Publicis Sapient AI Labs, are the indications that Publicis Groupe’s M&A strategies are different.
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