The UK will remain a key market for Publicis Groupe regardless of what happens with Brexit, its chief executive Arthur Sadoun has said, stating his belief in the country and in the local team leading the world’s third-largest advertising agency network.
He spoke to The Drum after the release of its third-quarter financial results where organic growth was up 2.2% – excluding loss-making Publicis Health Services which will be sold. Sadoun was positive about the future of the British advertising industry and the work his company was producing despite the continued uncertainty over a deal with the European Union.
Publicis’ third-quarter figures showed reported growth in Europe of 4.2% and organic growth of 4.4%. Net revenue in the UK was reported to have increased by 4.4% during the same period.
He lauded the leadership of both Steve King, chief executive of Publicis Media, who is based in the UK and of Annette King who was named as chief executive of Publicis Groupe in the UK just over a year ago and who has been building her own leadership team, recently naming former Ogilvy colleague Jo Coombs as UK chief operating officer for Groupe in the process.
“We are extremely happy with what Annette King is doing at the moment. She is having a real impact,” he stated. Next, he pointed towards the strength of the agency brands in the UK, with flagships such as Sapient.Razorfish, Saatchi & Saatchi, Digitas, Zenith and Starcom.
“We are seeing the benefit of this model. It is a place where we are strong in our expertise, we see good momentum, but of course, Brexit is a concern for everyone. The UK is our second most important market, behind the United States and we have an A-team and we are very ambitious there,” he continued.
Sadoun admitted that the uncertainty around a solid deal or no-deal between Britain and the EU was a concern but highlighted that to be a widespread issue for business.
“It is something that we are monitoring… we see a lot of potential in the UK which is a very advanced market - there is market share to take”. He added that there had been a reduction in client fees within the creative business across the industry, including within Publicis’ business, but cited continued growth in its biggest marketplace, America as continuing to help it deliver communications at scale.
“Despite what we see as headwinds mentioned by our competition and our clients, we have outgrown that because of the transformation of our model but it is also a very competitive market. We see a lot of clients saying that they are putting their fees under scope.”
Sadoun also reiterated his belief in the model of agency brands and why they should be retained, unlike that of the consultancy model, stating the need for unique cultures as being able to offer something different across the network.
“We are in the people business and sometimes we forget about that. Culture matters and that is why I think it will be very difficult for consultants to really enter our industry, we are already hearing from the acquisitions that have been completed by those guys, where people are already coming back,” he claimed.
Asked about the FBI’s investigation into media practices in the US, Sadoun also refused to be drawn directly on media reports without having seen any concrete evidence into what is being looked at, but he was confident that Publicis had nothing to hide and stated his belief in full transparency with clients.
“Trust and transparency are really central in the way we are operating and it is something we have put forward during the last year in the US as it helps our reputation.".
Publicis Groupe reported net revenue for the third quarter of €2,197m, taking 2018 to €6,477m for the year so far.