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Is digital at the heart of Publicis uncertainty?

French marcomms giant Publicis Groupe is widely thought to have stolen a march on its global rivals Omnicom and WPP with its two bold digital purchases, consultancy Digitas and marketing company Razorfish, the latter bought from Microsoft.

It has certainly invested boldly, to the tune of $1.8bn for the pair. But is the effort of working out what precisely to do with them, and who should do it, at the root of the current incertainty about who should run Publicis when chairman and CEO Maurice Levy eventually steps down?

Our correspondent Jorge (see comments) certainly thinks so as does veteran analyst Bob Willott of Marketing Services Financial Intelligence.

Logically the next leader should have been former Digitas boss David Kenny, a member of the company’s five-person executive board and, at Publicis, co-head of the company’s Vivaki umbrella digital media operation with long-standing media boss Jack Klues.

But Kenny has said he’s leaving, ostensibly because he doesn’t want to move to France but maybe because he realised he wasn’t going to get the top job.

As things stand the newly-appointed COO and former consultant Jean-Yves Naouri is in the driving seat (or is that the hot seat) but he has to wait until Levy makes his mind up when to go.

The marcomms giants are faced with a big dilemma over digital. Publicis and WPP in particular seem to be betting the house on it but will there be as big a space in the future for digital agencies and consultancies as they hope?

And can they merge the consultancy side with the media agency side as Publicis seems to be trying to do?

One of the things about digital is that every so often a truly big player like Apple or Google, or even Microsoft maybe, pulls a rabbit out of the hat that makes the whole process much easier to operate.

Which, highly conveniently, positions themselves as both media owner or platform owner and an entity that can fulfill all the functions of a digital media agency.

A consequence of this is that, to compete, the digital media specialists need to slash their charges, in much the same way that conventional media agencies have had to slash their charges as the processes of planning and buying such media have become much more akin to commodity trading.

But the (relatively) fat margins in digital were the reason companies like Publicis chose to invest in it in the first place.

It’s also interesting to note that online display advertising in the UK, perhaps online’s most eager adopter, fell by five per cent last year. As did most other branches of advertising of coure.

But just maybe clients are now looking at digital a bit more coldly, abandoning the lemming-like rush that characterised its first decade. This to, if true, will have an effect on those all-important margins.

So plenty to think about, especially maybe for the contenders for the Publicis throne.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.
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