Publicis Groupe CEO on Another Record Year, Retail Media and ChatGPT

With a second successive record year, Publicis Groupe chairman and chief executive officer Arthur Sadoun revealed that the company will continue hiring despite adding about 10,000 employees last year. He also spoke with Adweek about his views on whether there is a potential threat to advertising from AI innovation ChatGPT, and how is responding to client concerns in the months ahead. For the full year 2022, Publicis Groupe delivered organic growth of 10.1% and revenue growth was up 20% y-o-y to $13.74 billion (12.6 billion euros). Sadoun said the agency network is feeling “confident” about the year ahead despite a slowdown of the global economy. The holding company is forecasting between 3% to 5% growth over the coming 12 months. We will continue to hire in 2023, many in high growth areas and to feed the new business pipeline.Arthur Sadoun, chairman and CEO, Publicis Groupe Sadoun highlighted the performance of data and digital businesses Epsilon and Publicis.Sapient, achieving 12% and 19% annual revenue growth, respectively. The company saw growth across all its operating territories, with the U.S. market up 10%, Europe up 12% and Asia Pacific up 6.5%. Included among its major new business wins are AB InBev and Swarovski for media, Siemens for Creative and Stellantis for CRM. Still hiring The overall personnel costs grew for the year by almost a quarter (23.7%) to $8.95 million (8.21 million euros), with freelance fees alone rising by $70 million (64 million euros) in 2022 to $497 million (456 million euros). Restructuring costs reached $89.4 million (82 million euros), compared to $57.8 million (53 million euros) the year before. Sadoun credited the successful outcomes to both talent and the transformation the business has gone through since he became chairman and CEO in 2017. He says the company is now "firing on all cylinders." "We will continue to hire in 2023, many in high growth areas and to feed the new business pipeline," he said, having already hired GroupM’s EMEA CEO Demet İkiler as the network's Europe chief operating officer in January. “We are looking for people that are truly hybrid and understand the importance to connect data, creativity, media and technology,” he added, admitting that there had been some “boomerangers” who have returned to the industry following recent widespread tech layoffs. The company also revealed that it was “on track” to meet its target of employing 45% women in key leadership positions by 2025, up from 42% currently. Meanwhile, the #WorkYourWorld initiative, which allowed employees to work in any other Publicis office on the planet for six weeks, drew 2,340 participants for an average stay of 33 days in its first year. Retail media growth With the growing interest in retail media, Sadoun revealed that CitrusAd, the company’s tech company dedicated to the burgeoning sector, had doubled in size since its acquisition in July 2021. Discussing the differing strategies for its retail media offering, Sadoun explained that by pairing the data of Epsilon and the technology of CitrusAd, they are servicing the largest retailers in the US. If you put AI at the side of marketing, you win; if you replace marketing with AI, you lose.Arthur Sadoun, Publicis Groupe Amid a "more fragmented" retail landscape, Publicis is also continuing to build its recently announced joint venture with Carrefour, inviting other retailers use the emerging technology being built. “They will benefit from receiving Publicis’ data, and they will be able to put their inventory through clean rooms in order to make sure that they stay independent and share that technology while retaining their proper retail media strategy,” he continued. On new business accounts, Sadoun said the company would be on the offensive rather than defensive again in 2023 with “nothing significant” being defended at the current time. He also added that within the first weeks of 2023, it had yet to see any change in client behavior from last quarter despite economic conditions. 4 Retail Media Marketing Predictions for 2023 “What we have seen more than ever is the absolute necessity and urgency of most of our clients to truly transform, to adapt to a world where they would have to shift from cookies to identity to make sure that they've got a better balance between their paid media, where they will be renting audiences and their own media, where they will build their own digital ecosystem in order to go direct to customer,” he explained, citing Publicis.Sapient and Epsilon as providing that service. Meanwhile, Sadoun described the emergence of artificial intelligence platform ChatGPT as something he would only want his agencies to be using “for fun” rather than seeing it as a threat to the creative industry. He did credit Publicis’ own use of AI to deliver real-time data as a factor in the company’s strong earnings report. “If you put AI at the side of marketing, you win; if you replace marketing with AI, you lose,” he stated. Sadoun believes ChatGPT should be seen separately from AI and could be “a great thing for many people,” but that it did not “add value” to the advertising business.