Publicis Groupe CEO on Continued Growth, Retaining Staff and Preparing For Retail Media's Moment

The network has revealed in its latest quarter earnings report organic growth of 10.9% year-over-year in the U.S. while it grew by 10% in Europe, 16% in LATAM and in Asia by 12.5% as net revenue for the first nine months of 2021 reached $873.5 million (7,552 million Euros) with organic growth for the year so far, reaching 10.2%. North America saw revenues reach $1,857 million (1,602 Euros) for the U.S. (+10.8% organic growth) which chief executive Arthur Sadoun said was largely due to the performance of data and digital transformation business Epsilon and Publicis Sapient. “We are beating, by far, the market expectations,” Sadoun proudly told Adweek of the continued year of recovery from the impact of the Covid-19 pandemic during 2020. He placed much of that down to the network’s growing focus on first-party data capturing services, digital media and business transformation overall. “It’s really making a difference,” he said of both Epsilon and Publicis Sapient which have grown revenues by +13% and +20% respectively during the last quarter. We are building a solution with Epsilon and were very lucky to make that acquisition before this Google decision.Arthur Sadoun, CEO and chairman of Publicis Groupe “The huge investment we made in Epsilon and before that, in Sapient, is now really well integrated and enables us to outperform,” he added. “We have a business that, on a two-year basis despite the biggest crisis ever, has been growing 8% in the U.S. with Epsilon on a two-year basis growing 14% and Sapient growing 17%.” Publicis Groupe CEO Arthur Sadoun on Network's 'Full Recovery' From Covid-19 Impact In the U.S. traditional media and creative both grew by mid-single digits while the network’s health operations delivered double-digit growth for the sixth successive quarter. Across Europe, the U.K. recorded organic growth of 5.8% while France delivered 16.1% for the quarter and Germany was up by 10.5%. Facing the challenges ahead for the advertisers Sadoun cited the upcoming challenges that advertisers face such as the death of the third party cookie and the increase in retail media spend with retail currently totaling 9% of net revenue for the year to date. Having won the $400 million Walmart media account and having made the acquisition of Saas retail website company CitrusAd, finalized on Sept. 1, it is an area that the company is gearing up to do more business around. “Our job is to anticipate what is coming and the cookieless world is coming. We are building a solution with Epsilon and were very lucky to make that acquisition before this Google decision because when first-party data became a must if you really want to take back control of your customer relationship in the past, it has become vital because it will be the only way very soon. So we have anticipated this; by 2025, all of our CPG clients will spend more money on retail media than another other.” In the U.K. there is volatility post-Brexit and pandemic due to issues around product distribution from abroad, including a lack of long-haul drivers which has already led to empty supermarket shelves and petrol courts running out of fuel, sending consumers into a panic. There has also been a sudden rise in the cost of energy which led to a shortage in factory processing when some ran out of CO2 used to operate equipment. As a result, predictions have begun to hit news outlets that Christmas will prove difficult and that there will be a shortage of traditional supplies to celebrate the festive season. We showed them the confidence we had in our model and the confidence we had in them. Despite these rising pressures, Sadoun says he has seen no impact from the company’s clients in terms of their advertising plans so far but admitted that it didn’t mean that clients were not facing those challenges, especially in the automotive industry where the company has learned to be more agile in how it handles advertising the products that are available during a shortage. “How do we make sure that we personalize even more, to make sure that we can follow the consumer journey based on the restrictions… so for the moment, what the shortage of supply is teaching us is, a bit like the virus, we need to adapt faster to the new economic paradigm.” Talent retention On the industry’s race to retain and attract talent—described as "the Great Resignation" as the pandemic recedes—Sadoun claims that the functioning of AI management system Marcel saved thousands of jobs, but also believes that the company reimbursing fully any wage cuts that were taken has salvaged much of the talent within the business this year too. “I took the decision to reimburse everything that was sacrificed voluntarily by our people,” he explains while adding that the bonus pool was also “improved” to a level that was ahead of WPP’s in 2019. “This may be another reason why we don’t have a talent shortage today which is where being able to manage people properly because we gave them perspective at the time when things were still uncertain. We showed them the confidence we had in our model and the confidence we had in them.” With other wins during the quarter including Ferrero, Planet Fitness and TD Bank over the line, Sadoun would not be drawn on the loss of the Daimler's CRM business or the ongoing Coca-Cola pitch which is due to announce in the coming weeks, putting Publicis up against WPP, IPG and Dentsu. Publicis Groupe Acquires CitrusAd to Build 'Biggest Walled Garden in the World'