Publicis boss Maurice Levy is more concerned by a slowdown in its US business than the commercial impact of the Brexit vote as the agency holding group’s quarterly revenue jumped on growth in European advertising.
Sales hit €2.5bn in its second quarter, buoyed by gains made by Sapient or ZenithOptimedia, Publicis Worldwide, Publicis Health. Organic growth, which strips out effects from acquisitions and currency fluctuations, climbed 2.7 per cent in the period, with digital, primarily from the aforementioned agencies, up 5.1 per cent.
While better-than-expected, Publicis’ performance was hampered somewhat slower growth in the US where it has big accounts such as Coca-Cola and Procter & Gamble in the past year.
Conversely, Europe has been a bright spot for the business, which posted a 7.3 per cent jump in organic growth for the region in the quarter and a 5.1 per cent lift in revenue to €718m. Here the group has been buoyed by more business being up for grabs in most markets including the UK, France and Italy that in turn has seen Publicis swell its market share. Indeed, the company’s revamped ‘Power of One’ strategy is being used in pitches now and in turn the promise of a truly integrated offer is wooing more advertisers, with Asda’s recent switch from WPP the highest profile acquisition in the UK.
That growth along with encouraging discussions with clients is why Publicis chief executive Levy feels “extremely comfortable” post-Brexit vote and assured the UK will remain the group’s second biggest market. This is despite the prospect of the UK losing £1bn - or £70m a year – in lost advertising spend by 2030 should it leave the European Union, according to Pulbicis’ ZenithOptimedia.
“We should not be heavily impacted from the Brexit. Since we operate in the UK in local currency, as we do in all the countries in which we have operations…the geopolitical situation is uncertain in our days and we have to take this into account. We have seen recently the failed coup in Turkey, the unfortunate terrorist attack in Nice, the Brexit in the UK. Very different situations, but generating uncertainties in terms of economic terms,” he explained.
“Nevertheless, we feel extremely comfortable. Not only our transformation has been completed and the silos have been eliminated for its majority, we have designed or nominated the global client leaders, there are enthused, they are extremely satisfied with the possibility that offer the new organisation.”
Levy did warn that effects of losses would be greater felt in the third quarter, where organic growth will be weak” but not a “negative number”. This would improve in the final quarter of the year, he continued, when commercial gains from recent wins like the GlaxoSmithKline account will start to materialise.