Maurice Levy escaped most of last week’s most unflattering headlines for obvious reasons, and this week it’s business as usual as the Publicis Groupe CEO heads to Miami to discusses the future of marketing at the 4A’s conference.
Noreen O’Leary of Adweek spoke to Levy for an interview that went live last night, and his quotes are quite revealing. Levy still argues that the acquisition/integration of Sapient reflects the best way forward for Publicis, which he believes should be competing with consultancies like Accenture and Deloitte.
From the interview:
“We have to look at how the world is changing. We are still well behind all the new things that can have a huge impact on our business. … Look at Accenture, Deloitte or IBM and their acquisitions in the digital agency space. It is clear these very respectable companies will also play a role in the transformation of our clients and business.”
On why the Sapient acquisition is more important than the failed Publicis/Omnicom merger:
“The Sapient acquisition is something leading to a transformation—it’s not about scale. It adds technology, consulting, digital capabilities in a world where advertisers need the combination of what we call the alchemy of technology and creativity.”
On the state of Publicis vs. other holding companies:
“When you look at the competition, we can compete with all our classic competitors on everything but market research where we never had interest. We’re also capable of competing with the Accentures of the world where our competitors cannot.”
Levy says we’ve seen the last of the “restructuring” moves for now without mentioning the one that hit Publicis Healthcare Communications Group earlier this month. He also says that these moves will inevitably lead to some resentment among execs:
“With morale you will always have a few people who are unhappy because they have not gotten what they want and people who are resisting change. This is normal and true everywhere.”
He confirms that he will be stepping down as CEO as promised but declines to to elaborate on future plans and chairmanship opportunities. Still, we’re most struck by his Deloitte/Accenture comments. Everyone in the wide world of marketing is now apparently competing to run the best consultancy around.
A relevant personal aside: your editor’s first job out of college was in the marketing department of a “remote staffing” company whose primary competitor was Accenture. At the time, these two companies’ shared product (if one could venture to call it that) was data entry and call center work performed by mostly college-educated residents of urban areas in China and India.
You obviously know how outsourcing works, but to recap, the only reason this is a viable business in the first place is that companies facing pressure from investors send low-level tasks–or anything that can be done remotely–to offices in other countries that have far lower costs of living and median pay rates than the U.S. in order to boost overall profit margins. This is most often work that stateside employees would rather not do in the first place: for example, young professionals working for our former employer in places like Quingdao, China take property-and-casualty insurance documents that have been filled out manually by employees of small and mid-sized firms throughout the U.S., decipher their often-illegible handwriting and enter the information into a digital system, thereby allowing the stateside clients to maintain more accurate customer databases. Some of the work is more complicated but, as one of the managers of the Chinese office once told us, it’s all quite painfully boring.
The company in question was able to beat Accenture only because its service was so niche: property and casualty primarily concerns the owners of office buildings insuring their properties against the possibility that poor construction and incidents/accidents might lead to personal injuries and, therefore, lawsuits.
We only bring this up to highlight the sort of businesses that Levy believes his company should compete against moving forward. Accenture currently does a lot of work that is completely unrelated to call centers, but what it might be, exactly?
Here are three sentences that tell us very little:
- “Accenture Strategy was launched in December 2013 to provide services about business strategy, technology strategy and operations strategy.“
- “Accenture Digital was also launched in December 2013 to provide digital marketing, analytics and mobility services.“
- “Accenture Consulting was launched in June 2015 to provide technology, business and management consulting.“
We are not familiar with the finances of Accenture. But the company for which we worked now boasts profit margins that are significantly higher than those seen in Publicis executives’ wildest dreams.
Where are the majority of Accenture’s employees currently located? India. Last year, Fortune called it “the world’s most admired Information Technology Services company.”