With an annual budget of €500m Maurice Levy discusses Publicis Groupe mergers and acquisitions strategy
Publicis CEO Maurice Levy has revealed that the group is unlikely to enter into any large-scale acquisitions in Europe in the foreseeable future, explaining that the marketing services company is focusing on growing its presence within emerging markets.
Levy spoke to The Drum about the company's strategy at the Publicis Groupe Investor Day, where it emerged that the group is likely to spend between €400m-€500m each year as part of a growth plan that will conclude in 2018.
The day itself took place within the London headquarters of DigitasLBi, which was formed earlier this year following the acquisition of digital agency LBi.
"Acquisitions will be about emerging markets," said Levy. "We have already been acquiring a lot of operations in China, India and Brazil and we are planning to grow in other countries where the size of the market is not big enough but it will become so soon. It's very important to start in those markets."
Asked if this meant that the group planned to avoid acquisitions Europe, Levy was non-committal.
"To say that our plan is to be avoiding Europe, that would mean that we don't wish to invest in the old Europe. It is extremely important to strengthen our position in Europe and I see some areas where we can grow."
It is also clear that there will be no acquisition of any research companies while Levy remains CEO, and he was scathing in his criticism of some companies within the sector, claiming it more important to have access to data and know what to do with it.
"I don't believe that investing today in a market research company is the right thing for us. We should invest in the areas in which we have strengths to create a difference which is widening with our competitors and to make sure that group as a whole is the agency of digital growth; and I don't believe that the way that market research companies are working and the kind of research they are doing is a representation of the future world. Some are doing exceptional work to catch up with the future, but a lot are learning old techniques that are no liner effective."
Levy also went on to highlight the group's model of combining resources internally, while discussing the complexities of integrating a new business within the structure.
"Integration is always the next step, that the people feel good and that they are happy and that this is an operation they are proud to be a part of and want to build something within. This is what we are trying to do and our aim is to strengthen our digital offering with technology and to strengthen in operation in the fast growing markets, not only China, Brazil or Russia, but many other markets which are emerging today because the ones that we know well have already emerged and the difficulty for getting the right target is very important."
He soon turned his attention to an element he believed was "extremely important" about Publicis Groupe.
"We are the only one in the world which is combining so many resources and acting as one," he said, highlighting Publicis agencies in the room including Razorfish, Leo Burnett, Zenith Optimedia, LBi and Starcom MediaVest.
"This is something that is very hard to find in any other place. Particularly when you add the salt and pepper that is being brought by the digital operation. If you screen the market then you will hardly see someone capable of doing exactly what we do with the strength and depth that we have. What we want to do is to add technology."
He said the recent acquisition of Neve has brought that capability into the group.
"We want to develop innovative technology in order to take our clients to the next level. We are obsessed with how we can be ahead of the market. We want to offer what other agencies cannot. If we became another agency like [those] already in the market then the competition would be hard and we would be dreaming about a margin we won't reach."
He continued: "If it is creating new services to combine new technology and adding mobility to everything we do and to create new solutions for the new behaviour and the blurring of the media landscape then we are and will continue to be there. If there is something that is common to everything we are doing it is the innovation across all the operations - one common denominator, then it is innovation."
Levy was also unwilling to be drawn on rumours of a deal with another marketing group Interpublic Group.