Publicis Groupe yesteday afternoon unwrapped a major reorganization that would create four new hubs and new leadership roles within the holding company. They include Publicis Communications, overseen by Arthur Sadoun; Publicis Media, led by Steve King; Publicis.Sapient, under Alan Herrick; and Publicis Healthcare, led by Nick Colucci. The reorganization will also see Laura Desmond move into a chief revenue officer role, overseeing new chief client officers.
In an interview today, Publicis CEO Maurice Levy discussed with Ad Age the impetus behind the move and its timing, which comes amid a massive Procter & Gamble media agency review. He also outlined the efficiencies he's looking to achieve for clients with the reorganization and what this does -- or does not -- say about his ongoing succession plan at Publicis.
Advertising Age: Why do the reorgnization, and why now?
Mr. Levy: It's a process we started at the beginning of the year right after the acquisition of Sapient. The first [move] was thinking about repositioning -- what should be our purpose now that we have Sapient on board and we have a different set of skills. The second is that we know that for all the agencies there has been a golden era. During the last 30 years, we have grown through the silo approach [with] disciplines. The system has shown some limits in how the client can benefit from it. It shows clients are not ready to pay for duplication of services or people. They want something which is seamless, and fully integrated in one single platform. And if possible, in the same city under one roof. We see that there was the need for a transformation.
Advertising Age: A Procter & Gamble media agency change could have a huge impact on any holding company. Did the current review have anything to do with your move to reorganize and reshuffle talent?
Mr. Levy: We started our reflection long before we heard that P&G was going to put the media account under review. We explained the concept at a dinner with [P&G CMO] Marc Pritchard. We said this is what we're trying to do. This was back in March [before the review]. You don't change the organization and the way 75,000 to 80,000 people are working because one client is putting a large piece of their business into review.
Advertising Age: Does the move to give Arthur Sadoun oversight of the creative agency operations hint at a more concrete succession plan?
Mr. Levy: This is speculation by some journalists. I have seen that written. I can tell you one thing, which I said to a reporter. He [asked], 'Can we consider that this is a short list (Laura Desmond, Arthur Sadoun, Steve King and Alan Herrick) of succession?' I said, 'The board will have to make the decision, but clearly if you write just these four names, no one will deny it. So it's not just one guy. It's clearly four.'
Advertising Age: People are comparing this move, especially with the Publicis Media consolidation, to WPP's model. Do you agree?
Mr. Levy: It's not one small thing like GroupM. It's the whole transformation, and the fact that we will be tapping into the potential of the portfolio of all the solutions and putting in place a formidable first line with Laura, Arthur, Steve and with Alan Herrick. We believe now if we had to do it only for media we probably would not have done it. It's because we are doing it for the whole group, and that we will be managing clients with one single P&L.
Advertising Age: So each chief client officer under Laura Desmond will have his or her own P&L? How will that benefit Publicis?
Mr. Levy: They'll each have their own P&L, organization and structure. It's not a secret for the market that our growth is not where it should be, and we believe that Laura can do a great job for the essential issue. It's about how well we organize ourselves. The most important aspect of all this new organizing is the fact that we are bringing to our clients, under one single P&L with one single leader, all the resources with no fences and with no administrative work loads and none of the nitty gritty having an impact on morale of people. Thinking about creating an end-to-end solution which is easy to use is already extremely difficult. Delivering on top of one P&L makes the challenge even more difficult. I have worked with my team to see how we can address that issue. It's quite complicated so the end-to-end solution we have been working on is essential.
Advertising Age: What kinds of efficiencies does it create for clients? Or media efficiencies?
Mr. Levy: We don't have a number to share at this time. [As for media], there will be efficiency of scale.
Advertising Age: What's to come? Will there be layoffs or more news?
Mr. Levy: We have no plans for layoffs. There's still a lot of work to be done, and issues to be fixed with the execution of the program. It's not something that is happening just by blinking an eye. It requires a lot of work, and it's an adjustment.