Publicis Groupe seems to have stopped the rot in the first half of 2017, with increased net income of €387m against €381m last year. Revenue was up 1.9 per cent to €4.75bn but organic revenue growth, the key measure for most analysts, fell by 0.2 per cent.
In the second quarter of 2017 Publicis reported organic revenue growth of 0.8 per cent with growth at constant exchange rates of 0.3 per cent.
New CEO Arthur Sadoun (who’ll no doubt be appearing on YouTube soon) says: “When it comes to the outlook for the year, we expect the sequential improvement in organic growth to continue in the third quarter. And we should return to a growth rate comparable with peers in the second half of the year.”
The main reason for the modest turnaround seems to be improved fortunes in the US, where Publicis has won a number of new accounts, and the UK where it surprised some by winning Procter & Gamble’s massive £210m media account against competition from, among others, Omnicom’s new Hearts & Science which won P&G’s $2.7bn media business in the US.
Sadoun has also been busily cost cutting: closing some businesses and reducing staff and pulling out of industry awards for a year which will save the French-owned marcoms giant around €30m.
The big issue for Sadoun, like many of his peers, is the hotch potch of agencies, especially digital, Publicis has acquired over the years. The digital agencies have been largely rationalised although the toppy purchase prices still weigh on the accounts. But all these ostensibly separate agencies have their own substantial overheads and with the company’s reorganisation into Publicis Communications, Media, Health and Publicis/Sapient (digital) there is the opportunity for more radical streamlining.
But none of the holding company bosses have been brave enough to do so yet although WPP, which recently merged media agency Maxus into MEC, has made a tentative start.