Sapient and Epsilon Business Transformation Services Continue to Fuel Publicis Groupe Growth

Digital transformation services have continued to drive growth of Publicis Groupe which has promised a week’s wages to 45,000 members of staff in November in recognition of global economic uncertainty. The advertising network reported organic growth of 10.3% for the third quarter to generate $3.15 billion (3.237 billion Euros) with Europe and the U.S. both achieving organic growth of 11.1% and APAC of 4.1% with China alone growing by 5.9% despite ongoing lockdowns. “We have had a strong nine months. No one was expecting that we would deliver double-digit growth in Q3,” explains Arthur who admits he was one of those people. As a result, the business has reforecast its growth for a second time from 7% to achieve 8.5% in 2022. While Sadoun claims to have so far not seen “any material impact” from economic difficulties impacting client spending, he admits that he does see “some difficulties” coming in Q4 for clients due to growing inflation, the energy supply shortage, and the war in Ukraine. He also believes that underlying activity is still “very strong” for the rest of the year with a prediction of growth for the final quarter set at between 3-5%. As a result of the financial performance, the company will also pay a week's salary bonus to all staff who have worked at the company for over a year and do not have a bonus agreement within their contract to assist with them with the Christmas period. Business transformation needs The continued performance of the agency network is largely driven by that of its digital transformation businesses Publicis.Sapient and Epsilon, which make up almost a third of the revenue for the whole business and have achieved 18.1% and 13.9% respectively over the last three months. “The need from our clients for first-party data management, e-commerce and DTC has been booming,” Sadoun stated, adding that the model integrating the two businesses into its creative and media services is proving “extremely attractive” despite the expected squeeze on marketing budgets for global economic reasons. The performance of Sapient, which is around 30% of the business in the U.K., was also cited in the latest company results for the company’s growth of 22.6% there despite the economic chaos being experienced by the nation in recent months. Sadoun also stated that “the rest is doing well” too, and that he expects that momentum to continue onto the end of the year. “It’s a market where today there is an absolute need for business transformation due to everything that has happened and Sapient has been standing out to deliver on it. We feel good about the U.K., despite all the difficulties the country is going through.” Merger and acquisitions Earlier this year it was revealed that the network’s own transformation would continue through merger and acquisition deals with a fund of $450-680 million made available. So so far this year deals have included the acquisition of Changi Consulting, a cloud solutions company based in Dubai in September, while other deals this year included the software engineering firm Tremend and e-commerce intelligence business Profitero. Sadoun revealed that it is an acquisition from last year which is proving particularly popular – retail media business Citrus Ad, which he claimed was achieving three-figure growth. However, now the company is focused on bringing in either technology or people who can complement what is already in place rather than buying more. Publicis Sapient Captures Its Impact in 3 Documentary Films “Now, we are focusing on this kind of smaller acquisition that can complement in terms of talent and technology.” Among the major new business for the period was the global Mondelez media account, a pitch team Sadoun led himself, as well as winning McDonald’s media in the U.S. Nestle’s media in India and Digitas being made Crocs’ media and creative agency of record. From January, the Frankfurt office of Leo Burnett will take care of Commerzbank's advertising communication as lead agency too. He also declined to discuss the departure of the company's global chief marketing officer Justin Billingsley who is currently on gardening leave. Billingsley was promoted into the newly made role in April 2020 after holding the position of chief executive of Publicis' DACH operations.