Lévy on How He Plans to Own Digital Space

NEW YORK Since closing on its $1.3 billion acquisition of Digitas in January, Publicis Groupe has lost little time in finding acquisitions to build the U.S. company’s presence globally. In June, Publicis bought France’s Business Interactif, followed by one of China’s biggest interactive firms, CCG, in July. Both will be rebranded as Digitas. Earlier this month, the French holding company acquired Wcube, which will become Publicis Modem France, part of the network created earlier this year with the alignment of what was formerly known as Digitas’ Modem Media with direct and interactive unit Publicis Dialog.

In an Adweek interview, Publicis chief Maurice Lévy said his aim is nothing less than making his company the industry’s premier digital marketing concern—no doubt an objective that is held by his fellow holding company chiefs.

Lévy’s ambition is driven by a keen sense of timing: By 2010, the year he intends to step down as Publicis’ CEO, his goal is to have digital account for 25 percent of Publicis’ revenue. (Lévy says digital recently represented 7-8 percent of Publicis’ business, but this year he expects that amount to nearly double.)

“Digitas has transformed not so much our business model as it has our business culture,” he emphasized. “With the Digitas acquisition and the fact that [Digitas CEO] David Kenny is a member of our executive committee, digital is at the heart of our business and culture.”

Publicis plans to expand Boston-based Digitas, which has worked for clients like American Express, IBM, General Motors, Miller Brewing, Nestlé and Procter & Gamble, globally around six to eight hubs. In May, as part of its rebranding of Modem Media as the digital arm of Publicis Worldwide, the holding company bolstered Digitas’ presence in the U.K. by transferring most of Modem’s clients there to Digitas, including Barilla, the BBC, Shell and Vauxhall. In addition to the U.S., U.K. and new outposts in France and China, Digitas’ next expansion market is expected to be Germany. Publicis’ move to align Modem with Dialog builds up the critical mass of each of the units while offering Modem the opportunity to branch into customer relationship management and promotions. This year, Publicis also established Prodigious, a new Digitas digital production unit.

The Digitas acquisition may be Lévy’s most high-profile move into the digital arena, but the company has been making other, smaller acquisitions to stake its claim. Earlier this month, for instance, the company acquired Paris-based Phonevalley. The French market leader in mobile communications, which has a presence in four other European countries, will become the mobile platform for Publicis Groupe media networks. Publicis’ ZenithOptimedia forecasts that worldwide mobile ad spending, which totaled $871 million in 2006, will reach $1.4 billion in 2007. This year, Publicis also spearheaded an initiative with client HP to bring mobile communications companies together to agree on a common technology standard for QR, ‘Quick Response’ bar codes, which have revolutionized mobile marketing in Japan.

“We want to be a pioneer and we’re exploring many different avenues to make sure we don’t miss any opportunity to bring to our clients,” said Lévy. “This is about owning the [digital] space and taking on a lot of different initiatives in digital communications.”

As part of that effort, Lévy said Publicis has been investing in digital experimentation. One project, a social networking site for creatives called Blogbang (www.blogbang.com), launched at the end of June and is still in beta testing. Publicis has done no advertising or PR about the site, which is in French, but already [reaches 500,000 users a day on the network and distributes 3.5 million ads per day]. A part of the concept, developed by founder Julien Braun, a mathematician who has worked at Publicis for the past seven years, is to create a new advertising model utilizing the reach of blogs as Internet media. The site already has 1,500 blogs registered, with a network reach of 6 million people, and is adding 10-15 new blogs a day. Blogbang has a dual purpose in that marketers also post briefs there and the site’s creative members submit executions which are used for the blogs as well as more traditional media. (Members do not have to be affiliated with agencies.) The bloggers drive traffic, which determines the most successful executions and payout to its creators. The creative also utilizes rich media like Flash games. This month on Blogbang, Nescafe Dolce Gusto used a treasure hunt game across all participating blogs as part of a promotion.

Another new Publicis project is a joint venture with France’s Dassault Systems, a world leader in 3-D programs that allows companies like Boeing, Airbus and Toyota to build virtual prototypes. Publicis expects to launch a 3-D platform next year where a Web-based network of consumers and brand advocates—under supervision—can provide their input into product development. “It’s all about improving the look and feel of a product,” said Lévy.

More immediately, Publicis’ Droga5, formed by ex Publicis WW CCO David Droga, is set to launch the Honeyshed Web site next month. Droga is aiming to erase the line between branding and entertainment, with Droga5 execs describing it as “QVC meets MTV.” Honeyshed wants to connect brands and consumers through branded entertainment, long-form commercials and social networking.