Publicis Groupe posted double-digit revenue growth for the second consecutive year and predicted single-digit growth for 2023, which would exceed analysts' expectations.

In 2022, net revenue of 12,572 million euros was up almost 20% from 2021. Despite the uncertain economy, the holding company reported that organic revenue—which strips out the impact of acquisitions, divestitures and currency fluctuations—was up 10.1%, ahead of analyst expectations and Publicis’ own forecast calling for 8.5% growth. In the fourth quarter, Publicis' net revenue jumped by 18% to 3,462 million euros, and organic revenue increased by 9.4%.

Arthur Sadoun, Publicis CEO and chairman, told Ad Age that the fourth quarter growth came down to two factors: the “even better than expected” performance of its Epsilon and Sapient divisions, and the fact that clients had not cut their budgets significantly, as per some predictions. “We have not seen a major change in our client behavior,” he said. “There have been some localized traditional marketing cuts, but nothing material at [the] global level.”

Publicis, the world's third-largest agency holding company, is the industry's first to post fourth-quarter 2022 results. 

‘Fewer creative pitches’

For 2023, the Groupe is currently predicting organic growth of 3% to 5%. That is well above the flat predictions currently given by analysts due to the macroeconomic environment, said Sadoun. “We feel very confident that we will be able to build on our three-year momentum,” he said.

He added that the new business pipeline is currently good, particularly in the media sector. However, he said, “There are fewer creative pitches every day, because clients prefer to add partners or reduce partners on a project basis than completely and radically changing agencies in most cases.”

The company tried not to pass on any inflationary costs to its clients in 2022; for 2023, it expects to pass on inflationary costs at a maximum of 1%, said Sadoun.

The performances of Epsilon and Sapient, which recorded organic growth of 12% and 19%, respectively, were also major contributors to the Groupe's full-year results. Data and technology now represent a third of the Groupe's revenue, with increases coming from clients across the board, said Sadoun. The data and tech businesses were also helping its media and creative activities gain traction, he added.

“We are capturing a disproportionate share of our clients’ spend in first-party data in digital media, in commerce and in business transformation,” he said. “But this is also having an impact on our media and creative business. By putting Epsilon and Sapient at the heart of our model, so we can boost our media and creativity through data and technology, we can present ourselves not as a communications partner but truly as a transformation partner for our clients, which is even more important in the difficult economic times we are going through.”

While media grew strongly in 2022 on the back of new business wins such as Mondelēz's $500 million media account, PepsiCo’s media in China, LVMH’s media in the U.K. and France and Anheuser-Busch InBev’s global media, creative activities resulted in single-digit growth. Sadoun said this was still an “achievement” and above the industry average. The company's biggest creative win last year was the global business for Standard Chartered bank.

“Our ability to bring data and technology together to produce dynamic content is truly a game changer when it comes to creative,” he said.

Regional growth, record high bonus pool

Publicis reported revenue growth across every region in 2022. The U.S. grew organically by 10%, Asia Pacific by 6.5% and Europe by 12.3% for the year. North America as a whole grew by 9.9%.

There was a particularly strong performance by the U.K., which grew by 38% on an organic basis compared to 5.3% in France and 7% in Germany. Sadoun said this was down to a “stellar” U.K. performance by Sapient. Central and Eastern Europe grew by 7.5% organically, despite the activity in Ukraine being virtually stopped. 

Sadoun said the company's platform organization allowed it to perform well in 2022 and to increase its staffing by 8% overall—and it has also been able to reward employees despite inflation. “We were able to improve our margin while continuing to deliver a record high bonus pool for the second year in a row,” he said.

Publicis earlier this week unveiled a $100 million consumer-facing ad campaign for its Working With Cancer initiative that will include a regional Super Bowl buy (see below; the first ever by a holding company). Sadoun, who was inspired to launch the coalition following his own treatment for cancer, said that he was “extremely pleased” by the way Working With Cancer had been welcomed so far since it initially launched at Davos.

It is one way that the advertising industry can really make a difference, he added.

“If we do it well, I think this is really something that can be fixed by an industry like ours that puts creativity first and that has access to all the big companies in the world, and where we can work with media partners that can make the cause known,” he said.