Q&A: Publicis Groupe CEO Arthur Sadoun Discusses Strong Q1 Earnings

Today, Publicis Groupe stock jumped over 7 percent in Paris after the holding company reported a strong first quarter with net revenue up 1.6 percent organically, compared year over year to a 1.2 percent decline.

In the critical North American market, Publicis saw organic growth of 2.8 percent in the quarter; a feat after competitor Omnicom reported weakness in the market for its first quarter earlier this week. In Europe, Publicis reported a net revenue rise of 0.3 percent organically.

The company attributed the strong quarter in part to key global wins including Mercedes Benz, Campbell’s and Marriott. A major media account win for Publicis in the U.S. was Red Bull.

The report comes on the heels of Publicis announcing its 2020: Sprint to the Future last month which placed an emphasis on bringing one-to-one consumer engagement at scale.

Adweek chatted with Publicis CEO and chairman Arthur Sadoun this morning about the first quarter, the industry and what we can expect from the company going forward.

Adweek: You had a good quarter with organic growth up even in North America. We haven’t seen that from your competitors; Omnicom reported weakness in the market earlier this week. How did you accomplish that?

Sadoun: Yes, thank you for that. It has been a great quarter, but it has also been a very busy quarter. We actually have three objectives. In the fourth quarter results, we said clearly we would have a positive first quarter which is quite unusual for us. It’s a good performance. The reason why the U.S. is up is two-fold. First, [it’s because of] our new business track record. But it’s also because it’s in the U.S. where our model is the most advanced and our ability to connect data, creativity and technology is really transforming the relationship with our clients.

At the 4A’s Accelerate, P&G unveiled a new dedicated agency model for its North America Fabric Care business that pulls in talent from multiple holding companies including Publicis. This is certainly not a model we’ve seen before so can you tell me what your initial thoughts were to it and if you think this will be a trend that will continue with other clients?

To be clear I am not commenting on a specific client relationship. Having said that, what I can tell you more generally, is that what we are experiencing with P&G, we are experiencing with a lot of our clients. And we’re actually pushing for it for a simple reason—most of our clients today have difficulty finding growth, have a huge need to reduce their costs and need to branch out. The only way to do that is to transform. What really matters is putting together the agency of the future to work with the client of the future so they can transform, which most of them are starting to do. No doubt our clients have a need to transform, which is why we are on a ‘Sprint to the Future,’ to bring them really what they want which is, in the end, one-to-one consumer engagement at scale.

Speaking of the Sprint to the Future plan, in it, there was a focus on consulting. Can you tell me about that focus and how clients have been reacting to the plan in general?

I was surprised that I saw a few articles about this push to consulting. We never said that. We [created the plan] for three reasons. First it was extremely important to give direction to our people. The second reason why we did that was for our clients; so we can be more direct and explain our positioning. We didn’t talk about a push into consulting; what we said was being a partner of communications would be at the core of the transformation of our clients. To do that we believe we have three game-changers: data, dynamic creativity and digital business transformation. When you connect those three and bring one-to-one consumer engagement at scale, you make your client win and [we] win new business which is a very important point to me. We had an unprecedented track record in terms of winning new business in the first quarter. I think some people will translate that as pushing into consulting. It’s true we are clearly saying, yes, creativity will always be [the most important] but we want to make sure it’s properly fueled by data and technology to really transform our clients’ businesses.

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Lindsay Rittenhouse

@kitten_mouse

Lindsay Rittenhouse is a staff writer at Adweek, where she specializes in covering the world of agencies and their clients.