Publicis raises its 2023 forecast despite more difficult macroeconomic issues

Publicis Groupe CEO Arthur Sadoun outlined plans for people to return to the office on a regular basis and to accelerate “the AI-fication” of its operations as the holding company posted better-than-expected third-quarter results and raised its full-year revenue forecast. Publicis’ third-quarter organic revenue rose 5.3%, topping analysts’ forecasts calling for 3.7% growth. The French holding company now anticipates full-year organic revenue growth of 5.5% to 6%, up from its prior 5% forecast. The strong results came despite macroeconomic issues that have “become more difficult over the quarter,” Sadoun said. Check out the latest Ad Age events and award programs The ‘AI-fication’ of operations Sadoun, who has been bullish on AI since the launch of Publicis’ AI tool Marcel, said the company will be looking to introduce 13 new “workstreams” that use AI at its core. This will include implementing more AI in its capabilities and internal processes. This builds on partnering with AI companies such as OpenAI, which has become table stakes for all the other holding companies, Sadoun said. This will also be the next evolution beyond building AI platforms such as Marcel and ChatGPT. “We identified certain workstreams, nine for our capabilities, which is basically for our clients, and four for internal processes led by Sapient, that we will disclose to our people by the end of the year that will truly transform our business model,” Sadoun said in an interview. “And we're working very hard on that to make sure that AI is not only a press release with a partnership, not only a platform for our people, but something that is truly at the core of what we do.” From June: Publicis claps back at Marcel AI critics in Cannes Return to office Publicis is requiring employees to come back three days a week beginning in January, Sadoun confirmed. Starting in 2024, employees are expected to be in the office on Mondays and should not work two consecutive days at home. Sadoun, who in 2020 said Publicis will never become a “Zoom company,” said that productivity isn’t the only factor that played into this decision. “If you look at any kind of studies, they will all tell you that if you over-index on remote working, you’re going to lose in terms of collaboration, you're going to lose in terms of creativity, you’re going to lose in terms of innovation, which is so important for a company like ours,” Sadoun said, reiterating that most of Publicis’ companies have already gone back into the office regularly. Look back: Publicis digital unit mandates three days in office BBH employees in the U.K., for example, are going into the office four days a week, and some production companies are choosing to be in five days a week, he said. “We want people to understand that we are a people business before anything else. And being able to work together in the same place is how you create the level of innovation that a client is asking for,” Sadoun said. “By the way, clients, in most cases, are already back in the office.” Sadoun also addressed the current war in Israel, following a terrorist attack by Hamas over the weekend. Sadoun said the company hasn’t seen any pullback from clients since the recent events. Publicis is focused on taking care of its 450 employees in Israel, dozens of whom have been called upon to serve by the Israeli Army, he said. By the numbers Publicis posted third-quarter net revenue of 3.241 billion Euros, which converts to $3.44 billion, up slightly from the 3.237 billion Euros ($3.46 billion) posted in the third quarter of 2022. Sadoun credited the holding company’s media business and Epsilon’s data capabilities as the driving forces for its growth. Media saw high-single-digit revenue growth; Epsilon’s revenue jumped by 10.5%. Globally, creative agencies reported organic revenue growth in the low single digits. Publicis Sapient posted 1.2% organic revenue growth. Sadoun attributed Sapient’s low growth rate to clients across the industry being in a “wait and see” period when it comes to digital transformation work. Another factor affecting Sapient’s organic growth, said Sadoun, are high comparables due to a boom in digital business over the past few years. By region, organic revenue rose 3.2% in the U.S., 10.7% in Europe and 3.8% in Asia Pacific. Creative agency brands in the U.S. grew organic revenue by 5% in the quarter, a spokeswoman for Publicis said. Ad Age A-List & Creativity Awards Final deadline approaching for annual program Enter here Publicis was the first major holding company to release its third-quarter 2023 results. Omnicom is set to report its results on October 17th. Interpublic Group of Cos. is set to report on Oct. 20, followed by WPP on Oct. 26.

Publicis raises its 2023 forecast despite more difficult macroeconomic issues

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