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Cites Continued Weakness in U.S., European Ad Markets

By Published on .

NEW YORK (ADAge.com) -- Though Publicis Groupe reported revenue were flat for the second quarter and increased slightly in the first half, revenue shrank after factoring out acquisitions, which the company blamed on continuing weakness in U.S. and European markets.

The French ad company reported $586.6 million in revenue, up 0.3% for the second half, but after factoring out currency effects and acquisitions, revenue dropped 4.8% from the same period in 2001.

Full second-quarter and first-half figures including net income will be announced Sept. 10.

Asia Pacific, Latin America gains
The North American markets

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posted flat revenue for the first half and a 6.2% organic drop in revenue, while Europe -- 45% of Publicis' revenue -- posted a revenue increase of 4.3% but was down 3.3% on an organic basis. The Asia Pacific markets showed signs of improvement, showing 4.8% revenue growth and 3.4% organic growth, while the rest of the world benefitted from a marked improvement in Latin American spending, and posted a 3.8% increase in revenue and 9.5% organic growth.

In a conference call with analysts, Publicis Chairman-CEO Maurice Levy said the company has improved its new-business record, bringing in $684.4 million in net new business, which brought the total new business for the first half to $782.2 million.

Advertising markets continued to deteriorate in the first half, Mr. Levy said. But he added that Publicis' new-business gains will appear as revenue growth in the fourth quarter. In addition, several clients have product launches on tap for the second half, which will translate into "significant" ad spending increases. Still, the company is planning for next year assuming zero growth in the advertising market due to the "low visibility" in the worldwide ad markets, he said.

Bcom3 acquisition
Mr. Levy also reaffirmed the company is on track to close its $3.2 billion acquisition of Bcom3 Group by September. He said the two companies are in "final discussions" with the U.S. Securities and Exchange Commission and anticipate final regulatory approval by mid-month.

Mr. Levy added the two companies are "very confident" they will lose no clients as a result of merger conflicts. He noted Publicis has gotten additional work from Procter & Gamble Co. and General Motors Corp. since the merger announcement and has gotten assurances from Kellogg Co. and General Mills Co. that both food companies will stay.

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