Arthur Sadoun defends Publicis’ media transparency after WPP CEO Mark Read’s industry comments

Perhaps the most surprising thing about Publicis Groupe’s third-quarter results wasn’t the holding company’s 5.8% organic revenue growth—or the fact that net revenue totaled 3,423 million euros, which translates to nearly $3.72 billion. What was unusual is that the earnings report directly stated that Publicis is transparently handling data and media within its new connected offering. It stressed, in a series of slides labeled “clean data, clean trading and clean accounting,” that no client’s data is being shared with another client or used to improve Publicis’ own data bank. Paris-based Publicis also broke out a statistic that U.S. principal buying made up less than 1% of its revenue so far this year. Principal-based buying is the term for media agencies buying media and reselling it to clients. Ad Age in September reported that a deciding factor in Amazon’s media review—which was won by Omnicom and WPP—was how much retail media inventory holding companies battling for Amazon’s business would be willing and able to sell to its clients. “It would be wrong to think for one second that the reason why we are growing is because of our [principal-based activity],” Publicis Chairman and CEO Arthur Sadoun said in an interview with Ad Age. “It represents roughly 1% of our U.S. revenue. It has nothing to do with what could be a ‘black box,’ because it’s totally transparent,” Sadoun said. The “black box” references a remark from a competitor, WPP CEO Mark Read. When WPP reported second-quarter results in August, Read called out murkiness over principal-based buying—or as he phrased it, proprietary media buying—as a factor in media account wins. “I think there’s a discussion to be had around the use of proprietary media,” Read said in August. “I think there’s a number of, I would describe them as black box media models in the market that perhaps WPP has not offered. And I think some of those black boxes are not that transparent. I’m not sure in the long run that they’re going to work in a market that’s transparent like America. But we are looking at our proprietary media products and looking at how we can innovate to be more competitive. We do offer some proprietary media in the market in the U.S., but much less than a number of our peers.” Agency Review Tracker Stay up to date with the latest account reviews Click here Sadoun took exception with those comments—even if they were not directly targeted at Publicis. “I was very surprised by these comments,” Sadoun said. “I know what it’s like to be a CEO that is under pressure. I’ve been there. But honestly, throwing stones at competitors, or predecessors, in my opinion, doesn’t help him, nor the industry.” WPP declined to comment. Also read: AKQA Group CEO resigns from WPP-owned agency What was clear from Publicis’ earnings report is that it is focused on “connected media,” which knits together media, commerce and influencer offerings, as a significant area for investment and growth. This year’s acquisitions of social agency Influential and e-commerce shop Mars United Commerce cost the holding company a combined $1 billion, Saudon confirmed. By combining these capabilities with Epsilon, Sadoun said, the holding company can understand a customer’s full journey from where someone shops to which influencers they follow and on what platforms. This allows the holding company, using its AI tools, to provide personalized content at scale, he said, addressing a growing client need. Publicis recently secured an account in which it will create personalized content for Mondelēz International using AI. S4 Capital’s Monks also won a significant remit with General Motors earlier this year focused on mass personalized content. Publicis’ earnings report followed third-quarter results from Omnicom Group, which on Tuesday posted 6.5% organic revenue growth, seemingly besting the French company’s 5.8% increase. Sadoun, however, said that Omnicom reports revenue differently than other holding companies. According to consulting and advisory firm Madison & Wall, Omnicom reports gross revenue numbers while Publicis and other holding companies report net revenue. Madison & Wall calculated that Omnicom’s organic revenue growth is likely closer to 3% in the quarter. Omnicom wasn’t immediately available for comment. A-List & Creativity Awards Enter for a chance to be recognized as the best in advertising Submit your entry here

Arthur Sadoun defends Publicis’ media transparency after WPP CEO Mark Read’s industry comments

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