Despite a mixed global macroeconomic environment, advertisers are showing discipline rather than distress. Publicis Groupe CEO Arthur Sadoun reaffirmed this during the company’s Q1 2025 earnings call, emphasizing that brands are still prioritizing investments that can help them defend and expand market share.
“We went through COVID, we went through war, we went through inflation… everyone knows that at the moment, if you stop to invest, you lose market share that is very difficult to take back… our clients are definitely cautious, but they are also very competitive, and they are looking for opportunities to grow despite the uncertainty. It’s all about being more targeted, being more connected within the media,” he said.
The executive also acknowledged the potential impact of the current macroeconomic climate on the company’s operations.
“Many of our clients are facing a very challenging situation due to uncertainty on tariffs, rising inflation, and a geopolitical context that is more volatile than ever. This tough environment has not materialized in our numbers, with March being the strongest month of the quarter.
But like everyone else, we could experience cuts from several clients across many industries for the rest of the year,” he remarked.
Publicis Groupe has kicked off 2025 with a strong performance, reporting a 9.4% rise in net revenue in the first quarter. The growth reflects the strength of the company’s strategic positioning, driven by high-profile client wins and continued investments in data, digital, and tech. The Groupe reported a revenue growth of 4.9% over the quarter with North America and APAC both delivering 4.8%. Europe railed slightly at 2.7% while LATAM and other regions saw double-digit gains.
Confident as Competitive Landscape Narrows After Omnicom-IPG Deal
Sadoun said that the company is well-positioned to benefit from a rapidly evolving marketing services landscape, especially in the wake of the proposed Omnicom-Interpublic Group (IPG) merger.
Calling it an “encouraging” development, Sadoun emphasized that the shrinking pool of competitors is already creating a shift in client behavior and decisions.
“We are ideally positioned to seize the opportunities of a shrinking competitive landscape in what is a growing sector.”
“The marketing service industry we belong to is undervalued despite the resilience showed during COVID and its ability to grow faster than GDP in the last year,” he said.
With the potential Omnicom-IPG merger, the industry could see a significant contraction. “Now with Omnicom takeover of IPG, we will move from four main players winning more than 90% of the global pitches in 2024 to three,” he noted. “This 25% reduction of the competitive landscape is already having a material impact on our client’s decision on partners and will mechanically benefit us once the deal is completed.”
Sadoun also highlighted Publicis’s strong start to 2025, despite mounting economic headwinds. “Well, we had a very strong start to the year with organic growth at plus 4.9% in an increasingly uncertain environment. Our record new business performance in Q1 will offset the potential effect of a deteriorating macro environment and makes us very confident in our ability to deliver on our 4% to 5% organic growth guidance.”
Pointing to strategic investments, he added, “Our continued and disciplined investment in bolt-on acquisitions to strengthen our Category of One model is truly differentiating us from competitors and bringing the kind of innovation our clients need.”
Looking ahead, Sadoun remains optimistic. “As we enter our sixth year of strong performance, our capabilities, our model and the incredible talent and dedication of our people mean we expect to be able to sustain this level of outperformance in 2025 and beyond.”
“At the moment where our competitors are busy looking inward, we have only one focus, helping our clients navigate this complex marketing landscape and grow in this challenging time.”
Cautious Approach on Acquisitions Despite Strong Performance
Publicis Groupe has invested around €500 million since the beginning of 2025 and €1.7 billion since the start of 2024, according to Loris Nold, Chief Financial Officer at Publicis Groupe SA. He emphasized that the group is on track with its allocated investment envelope and that recent acquisitions are showing strong returns.
“If you look at the ’24 acquisition, it delivered 15% top line. We’re looking at up to 20% top line in 2025,” Nold noted.
Despite a healthy pipeline, he stressed the company will remain highly selective with its M&A strategy. “We remain very cautious when it comes to our acquisition,” he said, outlining the group’s disciplined approach.
Read more: Omnicom’s John Wren downplays client loss concerns amid IPG deal, tariff uncertainty
“They have to be immediately accretive — both top line and bottom line. We are very thorough when it comes to our integration plan. And we are also extremely strict when it comes to valuation.”
Nold added that while Publicis will continue to pursue acquisitions, the company will prioritize financial discipline and operational synergy. “We are on track to deliver our envelope, but we will stay very, very cautious,” he reiterated.
Key Role in AI-Led Transformation
During the earnings call, Sadoun acknowledged a slowdown in client spending in Q1, particularly impacting Publicis Sapient. However, he expressed strong midterm confidence in Sapient’s future as a growth engine.
“We have to be very cautious because we know that CapEx spend won’t resume very early… But I want to be clear, we are not expecting Sapient to deteriorate further,” Sadoun said, pointing out that all IT consulting companies are facing similar challenges due to cautious client behavior.
He emphasized Sapient’s long-term value, noting its consistent contribution over the years: “Publicis Sapient has been a growth driver for us when you look at the last five years. We roughly moved from EUR1.5 billion to EUR2 billion.”
Sadoun sees Sapient playing a pivotal role in future client transformation strategies, especially as AI adoption accelerates.
“Every one of our clients will need to transform their business model with the help of AI,” he said, underlining Sapient’s advanced AI and business transformation capabilities.
“What is very important is that all of our clients, when they start to resume CapEx, will want to do it in a cheaper and faster way, thanks to AI agents,” he added. According to Sadoun, this shift will favor Sapient’s lean and agile model over traditional labor-intensive consulting approaches.
“They have the product, they have the model… and we feel very confident for the midterm,” he concluded.