By Olivier Sorgho
(Reuters) – Publicis Groupe, the world’s third-largest advertising agency, said on Thursday it expects organic growth between 3% and 5% this year, as it banks on continued investments from clients on their digital transformation.
Despite a challenging 2022 marked by inflation, COVID-19 in China and a slowdown in global advertising spending, Publicis last year twice raised its guidance as client spending on digital marketing boosted sales.
“We haven’t noticed a change in the behaviour of our customers due to inflation,” Chief Executive Arthur Sadoun told journalists in a call regarding Thursday’s results, echoing statements from October.
Its digital and data-driven businesses Epsilon and Sapient, the former of which was acquired in 2019, had organic growth of 12% and 19%, respectively, in 2022.
“Now, we’re on the lookout for so-called bolt-on acquisitions,” Sadoun added.
CLIENTS PREFER RETAIL MEDIA
Responding to a question on clients’ preferences for ad placement, Sadoun said there was a transfer away from traditional television and towards smart TVs, as well as towards retail media in general and first-party data.
“There is an underlying trend towards our clients who say: instead of going to invest on CNN, we’re going to go to Walmart.com because by definition it’s more efficient, it’s more direct, I’m building a direct relationship with my consumer.”
He added that clients’ willingness to continue advertising on Twitter varied on a case-by-case basis.
Publicis, which owns ad agencies Leo Burnett and Saatchi & Saatchi, hopes to navigate a global shift in advertising trends as Alphabet Inc’s Google looks to phase out the use of third-party cookies.
The company recorded organic growth of +10.1% in 2022 with net revenue reaching 12.57 billion euros ($13.81 billion), against 10.49 billion in 2021.
($1 = 0.9102 euro)
(Reporting by Olivier Sorgho in Gdansk; Editing by Matthew Lewis)
