Publicis Groupe splutters to a halt in Q3 2016

Publicis Groupe spluttered to a halt in the third quarter of 2016, reporting organic growth of just 0.2 per cent (sales of $2.55bn), down from 0.7 per cent in the second quarter.

The company has been hammered in the US, losing a string of big media accounts including P&G and Walmart. It did, though, win Walmart’s creative account. It’s not out of the media woods yet: client Miller Coors is reviewing its global media as is Mars outside the US.

In total the US was down four per cent while Europe was up 7.6 per cent with the UK a standout. Publicis London has won Morrisons’ creative account while Asda’s creative and media has been combined at Saatchi & Saatchi. CEO Maurice Levy (below) did warn of fourth quarter “uncertainty” over client spending plans. Which may mean that the likes of Morrisons and Asda won’t be playing Santa Claus for their agencies this Christmas.

Maurice Levy, French advertising group Publicis Chief executive, attends a Reuters Global Media and Technology Summit in Paris in this June 12, 2012 file photo. Advertising groups Publicis Groupe SA and Omnicom Group Inc are in late-stage merger talks, according to reports. REUTERS/Mal Langsdon/Files (FRANCE - Tags: HEADSHOT SCIENCE TECHNOLOGY MEDIA)

What’s to be done at Publicis? Long-serving CEO Levy is retiring next spring with Publicis Communications boss Arthur Sadoun the likeliest successor. Levy recently reorganised the company into four hubs: Communications, Media, Publicis.Sapient (housing digital consultancy Sapient which it bought for $3.7bn) and Healthcare. This was hailed as a more client-focussed structure – the “Power Of One” – abandoning those hated ‘silos’ in favour of a rather unfortunate acronym.

This may appeal to clients but clients worldwide don’t appear to find agencies, especially media agencies, very appealing at the moment. It could herald another round of cost-cutting with various agency functions like back offices being combined. Outside its main markets all the Publicis creative agencies already operate under the Publicis Communications banner.

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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.