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Publicis Groupe reports 4% revenue growth for 'patchy' 2014

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By Stephen Lepitak, -

February 12, 2015 | 5 min read

Publicis Groupe recorded a 4.3 per cent growth in revenue to €7,255m for 2014 it has revealed with organic growth of 2 per cent during a year that chairman and chief executive, Maurice Levy, described as “patchy”.

Maurice Levy

The marketing services network, which recently completed the $3.7bn acquisition of Sapient Group, saw its operating margin increase by 3.8 per cent to €1,182m while operating income dropped by 4.8 per cent to €1,069m year-on-year.

For 2014, alongside the group's reported revenue growth of 4.3 per cent, regionally Europe rose by 4.6 per cent to €2,154m while North America grew by €3,490m. BRIC+MISSAT increased by 2.2 per cent to €938m and reported revenue across the rest of the world was flat at 0.1 per cent growth to €673m.

During the final quarter of the year, total reported revenue grew 11.5 per cent to €2,149m, while by region, Europe increased in reported revenue by 4.7 per cent to €650m and North America recorded the most significant growth of +16.3 per cent to €986m. BRIC+MISSAT was up by 13.9 per cent to €304m with the rest of the world increased by 9.4 per cent to €209m.

Digital revenues grew by 7.3 per cent overall for the year, with Europe by 8.9 per cent, North America by 3.2 per cent, BRIC+MISSAT by 33 per cent and the rest of the world by 29.4 per cent, while in contrast, analogue revenue fell by 1.4 per cent in total.

It was also predicted that over half of revenue for the business in 2015 would be delivered through digital, with this year's digital revenue at 42 per cent.

Speaking during a conference to discuss the figures, Levy described events for the year, especially the first part until September, as “not very good at all” with “insufficient growth” which he claimed was not a reflection of the company's capabilities and blamed the impact of a reduced management team as a result of “other projects that have not come to fruition” referencing the failed merger with Omnicom last year.

The “difficulties” experienced by Razorfish during the year was also mentioned on several occasions as a factor for the results of the first three quarters.

However the final quarter saw Publicis Groupe beat its expectations, stated Levy, with “solid” growth which he claimed reflected the health of its customers across all fields as well.

“The Publicis model is doing well. It is robust and our strategy choices over the past few years are the right choices. Sometimes these choices are a gamble but we have evidence that our choices have stood the test of time and were the right decisions,” declared Levy resolutely.

He also described Sapient as “a gem” and a company which was unique within the marketplace which would bring it “closer to the internet”, which he claimed was something the group’s competitors were not able to replicate.

Continuing his reasons for acquiring Sapient, Levy highlighted the trend of convergence as something that meant “customers faced a world that was entirely different to their experience to date,” which could not be resolved by bolting on an answer or running a marketing campaign.

“Companies are faced with two major changes of paradigm that entail a radical change of business model – changes that are driven by digital developments and innovation: firstly, the convergence of models, tools and solutions, and, secondly, new forms of consumer behavior, with consumers better informed, with greater access to communications, giving them a prominent role in the economic arena.

"To avoid their businesses being ‘uberized’, companies find themselves having to rethink their business model, their marketing and even the channels through which they distribute their products and provide services. For them as for us, transformation is the only way forward. This is the context in which we became interested in Sapient, a truly unique company combining digital, technology, consulting and e-commerce,” stated Levy.

Earlier in the year, the group also named a new directoire made up of chief executives from across its major agencies, while Levy signed a contract to remain with the company until 2017,

Publicis Groupe SapientNitro Razorfish

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