Publicis Profit Slips 1.1% in 2008

CEO Maurice Levy: Global Advertising Market Will Fall 2% to 3% This Year

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LONDON (AdAge.com) -- Publicis Groupe reported a 1.1% fall in profit to $580 million in 2008, as CEO Maurice Levy predicted a global 2% to 3% decline in the advertising market for 2009 and "significant, stark deterioration" in the first quarter.

Maurice Levy
Maurice Levy Credit: Julio Piatti
The group's organic growth was 3.8% in 2008, up from 3.1% in 2007. But it was down to 1.1% in the fourth quarter, compared with 4.2% a year earlier.

Nonetheless, Mr. Levy was bullish about Publicis Groupe's prospects for the year at the group's annual results announcement this morning. "We don't need to be in the eye of the recession; we can stay on the margins," he said.

Publicis Groupe's European and Latin American operations fared badly in the fourth quarter, but North America outperformed the group, with organic growth of 1.8%, helped by digital success. Digital accounted for 19% of revenue worldwide in 2008, up from 15% in 2007.

Publicis Groupe, which is the parent of ad networks including Leo Burnett, Saatchi & Saatchi, Publicis, Fallon, Starcom MediaVest and ZenithOptimedia, posted record profit margins of 16.7% in 2008. Publicis Groupe is the fourth-largest global communications group.

'Performed fairly well'
"Never in the history of man have we had a crisis with such high volumes of losses," Mr. Levy said. "Huge sums of money have just vanished. But we have performed fairly well and done better than our competitors because we are in control of our business. Our culture is a family business culture. We are flexible, and we don't spend money we don't have."

Mr. Levy said he does not expect to make wide-scale redundancies. He admitted that some people have not been fully employed but said Publicis Groupe will need extra people to work on the $1 billion global Carrefour business, which it won in January.

He quoted Sam Walton, founder of client Walmart, who said, "I was asked what I thought about the recession. I thought about it and decided not to take part."

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