City Spotlight

Paris: An In-Depth Look at the Biggest Ad Market in France

The City of Lights Is the First Stop in Our New Monthly Series Showcasing Adland's Most Intriguing Cities

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The advertising and marketing worlds have a tendency to talk about their own business in regions such as "EMEA" and "Asia-Pac," but the truth is that the pulse of the business is far more nuanced. Ad markets are facing unique challenges and opportunities depending upon where in the world they are. They vary greatly from country to country, and sometimes, even city to city in large countries such as India and the U.S.

That's why we're kicking off a new series, "City Spotlight." About once a month, we'll delve into a different world ad market, reporting on its agency community, startups, prospects for talent and more. The goal with this series is largely to educate our readers outside of these markets, providing them a quick and digestible report of what's happening on the ground.

Given the Cannes Lions Festival is in France this month, it seemed timely to shed some light on the biggest ad market in the country: Paris. It counts for a tiny percentage of the global ad expenditures each year, but it boasts powerful marketers, it's where the agencies are, where the startup scene is and, most importantly, where the best talent lives and wants to work. And now that the French presidential race is over with the election of new leader Francois Hollande (the election meant a temporary freeze in ad activity as marketers were deciding how they were going to allot their budgets through the remainder of the year), it's back to work for Paris.

MARKETERS
France is home to a slew of major global and large European advertisers, including L'Oréal, Evian, Danone, Carrefour, Renault, Peugeot, Orange, Orangina, Michelin and Perrier. It's also home to some of the world's-biggest luxury brands, such as conglomerate LVMH -- which owns a dazzling array of companies from Marc Jacobs to Dom Perignon -- as well as Cartier, Hermes and Chanel. Global marketers with a major presence in the market include McDonald's, Nestlé, P&G, Unilever and Volkswagen. These brands loom large here, and new consumer brands in areas such as packaged goods and retail simply aren't starting up with the same fervor as they do in other markets.  

AGENCIES
Given two of the world's top 10 agency holding companies -- Publicis Groupe and Havas -- are based in Paris, the market is somewhat dominated by these huge players. Publicis and BETC, respectively, are the biggest in France. TBWA, Paris, is the third-largest shop in the city, with about 1,500 employees. Ogilvy has about 180 people. Both indie Fred & Farid and Publicis' Marcel -- which was digital agency of the year at Eurobest -- have grown to more than 200 in the past few years, a large number of staffers in this market. Paris has long been dominated by big agencies, and unlike in other markets such as London and San Francisco, where well-known creatives decamp with regularity to start their own shops, there's not much startup activity. Among the newcomers that the industry is watching with interest are AKQA, which recently opened in town, and Sid Lee. Interactive shop Nurun gets more attention here than in other markets, and creatives agree that guerrilla- marketing shop Buzzman is doing some of the most attention-grabbing work these days.

MEDIA
Consider that the city of Shanghai alone is on track to reach 30 million people in population, while all of France has about 60 million people. "It's a small country, so it's still very easy to touch people with billboards and with TV," said Fred Raillard, one of the founders of hotshop Fred & Farid. He acknowledges that traditional media is still heavily leaned on by marketers, despite the fact that one of the specialties of his shop, started in 2006, is digital work. In his view, digital isn't quite affecting print media yet in the same way it is elsewhere -- while Parisians are increasing their consumption of digital media, newspapers such as Le Monde, Le Figaro and sports daily L'Equipe are still being flipped through in cafes across the country by citizens of all ages every day. "Digital is the new media, but it's additional, it's not going to replace print," said Mr. Raillard.

TALENT
One big concern that weighs on the minds of U.S. agency leadership isn't such a worry here, and that 's the notion of reeling in top talent. Paris agency leaders say they're not fearful of a major brain drain of design and digital talent, largely because France hasn't got a Silicon Valley or players like Facebook, Google and Twitter that can swoop in and poach agencies' best players. Agencies feel confident that advertising is still one of the more attractive industries for young people. It helps that top creatives here can achieve a bit of rock-star factor (although not quite on the same scale as they can in Brazil) and it's commonplace to have ad folks regularly featured on TV news programs or trumpeted in newspaper headlines. Another difference? More so than in other global ad markets, recruitment is done from major business schools. That's one of the reasons why agencies say some of their strongest talent is in their account teams.

STARTUPS/TECH
Though Paris gave birth to the father of venture capital -- Georges Doriot -- you'd never mistake the Champs-Elysees for Sand Hill Road. That said, Paris has a vibrant startup scene. Players like Dailymotion (video-sharing) and Deezer (music-streaming) are examples. Entrepreneurs like their homeland for its wealth of startup subsidies and programs like OSEO, which give financial support to new ventures. Growing a business, however, is another story, and a tough one given that France's small market size makes scaling difficult. That's why ad agency startups are few and far between. Plus , now there is the specter of a new regime lurking in the background. The two data points most frequently associated with Mr. Hollande are the 75% top-bracket income tax and an old quote, "I don't like the rich." It's enough to have a few VCs and Zuckerberg wannabes rattling their passports and talking about moves to Singapore.

CHALLENGES
To best help clients prepare for the future, the agency community of Paris overall needs to step up digital. Said Elie Ohayon, the new chairman of Saatchi & Saatchi Duke: "We are weak in digital and integrated work, and it's probably [the case for] the whole Paris market." According to Mr. Ohayon, there is often pushback from clients when it comes to nontraditional work -- "Clients are not jumping in this new world as fast as they should," he said -- but it's agencies' responsibility to understand social media and tech to offer innovative solutions. And given that France was one of the first iPhone countries outside the U.S. and one of the fastest penetrations for Facebook, it shouldn't be the case that Paris is behind U.S and Scandinavia from an agency perspective, Mr. Ohayon said. Many agency leaders also say they need to work hard to elevate their image creatively in the world. Despite the fact Cannes is held in France, agencies struggle to come out on top and many in the community are frustrated that Paris isn't doing better.

OPPORTUNITIES
Given a strong legacy of longtime relationships in this market, agencies should use account-management skills to their advantage. Additionally, given the size of the market, it's important to increasingly look outward to doing business in new markets from Paris. As Arthur Sadoun, head of Publicis Conseil, said, "There is no scale in France, and if you want scale, you have to go after international business." Due to the time zone, it's easy to work with both the U.S. and Asia, and big agencies are increasingly trying to do work for clients in Paris as well as those internationally. In a world that is shrinking in terms of media investment, this is important, Mr. Sadoun said.

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Contributing: Matthew Creamer

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