Buoyant Publicis Groupe buys AG2 in Brazil, puts more pressure on WPP

Publicis Groupe, fresh from announcing a startlingly good set of half year results, has splashed out in Brazil by buying 170-strong digital agency AG2.

The acquisition neatly fits Publicis boss Maurice Levy”s avowed intention to expand in digital and faster-growing markets and puts more pressure on the larger WPP, whose strategy is the same, to match its recent performance.

PG’s revenues increased by 14.9 per cent in the second quarter following an 8.1 per cent increase in the first, far ahead of any of its rivals. Its profits rose by 27.5 per cent to hit €213m.

Sir Martin Sorrell’s WPP announces its first half results later this month and is highly unlikely to produce growth on anything like the same scale, if at all.

Sorrell’s last big bet was buying researcher TNS for just over £1bn just before the credit crunch struck in 2008. With its existing research companies in its Kantar group this gave the company formidable scale in research but it still seems unable to dent the dominance of Nielsen in the US, by far the largest and most profitable research market.

Levy, by contrast, has spent the company’s money on digital, most notably with the acquisition of Razorfish from Microsoft for a bargain $530m. His agency brands which include Fallon and Saatchi & Saatchi as well as Publicis have also performed strongly, Fallon winning Nokia and French Connection so far this year as well as Cadillac in the US (thanks to a bit of arm-twisting by Maurice in the wake of Publicis being dumped by Chevrolet).

No wonder the veteran French executive has decided to postpone his planned retirement.

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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.