Arthur Sadoun believes Publicis Groupe can reach WPP for top holding company spot

Publicis Groupe Chairman and CEO Arthur Sadoun believes his holding company is trending to reach, and possibly surpass, WPP in terms of net revenue by the end of the year after a strong second quarter. “We are trending to take global market leadership by the end of the year,” Sadoun told Ad Age, noting that WPP’s own second-quarter and full-year results could change his forecast. Publicis reported organic net revenue growth of 5.6% in the second quarter and 5.4% organic net revenue growth for the first half of the year. Publicis’ net revenue for the quarter was about 3.5 billion euros, or $3.7 billion As a result, Sadoun is upgrading the holding company’s full-year organic growth guidance to a range of 5% to 6% from the previous range of 4% to 5%. Organic growth strips out acquisitions, divestitures and the effects of exchange rates. Ad Age Agency Report 2024 Revenue and analysis for agency companies Click here Last year, WPP posted $14.8 billion in revenue less pass-through costs for the full year compared to Publicis’ $14.2 billion net revenue for 2023. One area where Publicis is closing the gap with WPP is media, according to Brian Wieser, the founder of media and ad consultancy Madison and Wall. He wrote yesterday that, “In terms of net revenue, GroupM had approximately $5.7 billion last year vs. Publicis Media’s $4.9 billion. If current trends persist, the gap between the two might only be around 10% of size by the end of this year. As recently as 2015, GroupM was twice the size of Publicis Media on our estimates.” GroupM changed global CEOs yesterday, appointing Brian Lesser to the post. In global billings, GroupM is still significantly larger. GroupM’s total client billings of $62.6 billion in 2023 were about $14 billion higher than Publicis Media’s $48.5 billion, according to COMvergence rankings. WPP declined to comment for this story. Also read: WPP’s GroupM appoints new global CEO Publicis Groupe ranked third behind Accenture’s Accenture Song (second) and WPP (first) in terms of 2023 worldwide revenue, according to Ad Age’s 2024 Agency Report. Macroeconomic conditions such as interest rates affected part of the holding company’s business including Publicis Sapient, which posted a 3.8% decline in the second quarter. The business transformation unit is still winning projects, but clients are delaying implementation, Sadoun said. “The paradox is that 98% of clients [in the industry] know that they need to profoundly transform their business because of AI,” Sadoun said. “But there are macroeconomic difficulties at the moment, [causing them to] have cold feet or a wait and see attitude.” The holding company’s growth in the quarter was spearheaded by double-digit growth in its media offering, 6.1% growth in its Epsilon data business, significant organic growth in all of its regions, continued momentum in new business and 11% net revenue growth in tech sector clients. “The tech sector is starting to invest again but they are making an arbitrage between the partners that can really help them. The fact that we have first-party data that can complement their data, the fact that we can connect uniquely, whatever they do in paid media with their own digital ecosystem, and the fact that we have 45,000 engineers ... makes our proposal truly competitive to others.” Publicis has picked up several significant wins so far this year including Hershey, Lego Group and Pfizer. Large account wins accounted for 1-2% of its growth this quarter. One major loss was GM, which shook up its agency roster including several creative accounts held by the holding company, particularly Leo Burnett Detroit. Sadoun declined to comment on GM specifically. “Detroit is a very important city for us,” Sadoun said. “In Detroit, we have some local clients but we also manage some global clients out of Detroit. We have more than 500 people in Detroit. So it’s a place that matters a lot for us. We are committed to continuing to invest in talent and capabilities there. We just see an opportunity to do more and definitely not less in Detroit.” Agency Review Tracker Stay up to date with the latest account reviews Click here Other key points

Arthur Sadoun believes Publicis Groupe can reach WPP for top holding company spot

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