Publicis Groupe has reported “solid” organic growth of 2.8% for the first quarter of 2021, boosted by strong performances in both the U.S. and Asia. Europe, however, is still lagging behind as it fights a resurgent virus and ongoing lockdowns, and the company’s outlook remains “cautious.”
Although organic growth was positive, net revenue fell 3.6% to €2,392m from €2,481m a year ago, as exchange rates had a negative impact. The U.S. grew by 5.1% on a organic basis, on the back of strong performances by Publicis Sapient, up by 11.2%, while Epsilon grew by 4.7% and digital media overall saw double-digit growth.
Shift to towards digital and d-to-c
The U.S. in particular benefited from a shift in investment towards digital channels, e-commerce and direct to consumer, according to Publicis. “Clients have been investing more than expected in those channels,” said Publicis Groupe Chairman and CEO Arthur Sadoun in an interview with Ad Age, adding that he sees this as a long-term shift. “You are going to see a shift from linear to advanced TV, an acceleration in e-commerce and direct-to-consumer not only for digital clients but for any bricks-and-mortar client.”
Asia is also coming back to growth. The Asia Pacific region as a whole grew on an organic basis 5.7% and China, the first country impacted by the pandemic in 2020, recorded organic growth of 3%, on the back of new business wins including L’Oréal’s media business.
Europe, however, has not been performing so strongly. Revenue was slightly down, 1.8% on an organic basis. The U.K., which has been in lockdown since the start of the year until this week, declined organically by 3.4%, although this was affected more by the lack of clients instigating major business transformations; U.K. media and creative growth was positive. The lack of outdoor advertising on public transport also affected Publicis’ performance in its native France; excluding this, France grew by 4.9%, while Germany was up by 6%.
Other new business wins in the first quarter included Infiniti’s global creative, AB InBev’s data business, Toyota’s advertising portfolio in Australia, and Unilever shopper marketing and Samsung media in the U.S.
Publicis is predicting that the second quarter will present a more positive picture everywhere. The Groupe expects to recover between 60% to 80% of what it lost in the second quarter of 2020, implying an organic growth of 8%-10%.
However, Sadoun warns that the crisis is not over and says “we remain cautious in what is a still very challenging environment.”
“The crisis is not over. The real question is how much will we recover everything that was lost last year?” he says, adding that recovery “will not be only difficult for health reasons, it will be difficult for mental health reasons.”
He says the Groupe is prioritizing mental health among its employees and putting in place processes to keep people connected. Marcel, its virtual platform, will continue to play a vital role in its online communications as staff in many countries remain working at home.
As for last week’s announcement that the Cannes Lions will take place as a fully digital event, Sadoun says that being based in Paris and given the new French lockdown, it “did not surprise me at all.”
“The question now is how will we as an industry make Cannes online an event that is inspiring for everyone, starting with the youth. You have many people that have become invisible that need to feel that this industry means something.”