Publicis reaffirms outlook as AI-powered marketing demand drives quarterly growth

By Reuters News

By Leo Marchandon

Oct 13 (Reuters) - Publicis PUBP.PA confirmed its full-year outlook after the French ad giant's third-quarter organic growth topped market expectations on Tuesday, driven by client demand for AI-powered marketing.

Organic revenue grew 5% in the quarter, ahead of a company-provided consensus of 4.8%.

The global advertising market has consolidated into three groups after Omnicom OMC.N completed its purchase of Interpublic last year. The new "Big Three", which also includes Britain's WPP WPP.L, now win 91% of major pitches, up from 74% a year ago, Publicis CEO Arthur Sadoun said, citing data from Convergence.

Clients that once took six months to compare four or five agencies now pick one within weeks, and those that choose Publicis do so for its large consumer data, Sadoun added.

The group's online model tracks 9 in 10 adults with internet activity worldwide, knowledge that Publicis pairs with brands' customer data and AI analytics to plan marketing campaigns.

"AI does not necessarily destroy jobs when there is growth," Sadoun said. Publicis had about 65,000 employees in 2017, when it started rolling out AI tools internally, and has some 115,000 today, he added.

Net new business, or contract wins minus losses, reached $2.2 billion in the quarter, according to a tally by JPMorgan analysts. Net revenue grew 7.9% to €3.81 billion ($4.26 billion).

The contract wins include PepsiCo's media account, Sadoun confirmed, saying Publicis had secured about 2 percentage points of growth for next year, enough for an eighth straight year of beating the market.

Publicis' media business, making up 62% of net revenue, grew at a high single-digit percentage. Consulting arm Publicis Sapient was slightly down due to client caution over costly projects, but grew again in the US and should turn positive in the fourth quarter, Sadoun said.

Publicis expects an annual operating margin slightly above last year's 18.2% and free cash flow of about €2.2 billion.

($1 = 0.8951 euros)

Capital.com is an execution-only brokerage platform and the content provided on the Capital.com website is intended for informational purposes only and should not be regarded as an offer to sell or a solicitation of an offer to buy the products or securities to which it applies. No representation or warranty is given as to the accuracy or completeness of the information provided.
The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.
To the extent permitted by law, in no event shall Capital.com (or any affiliate or employee) have any liability for any loss arising from the use of the information provided. Any person acting on the information does so entirely at their own risk.
 

Cryptocurrency-related content is intended solely as news and market commentary. Crypto Derivatives are not available to Retail clients registered with Capital Com (UK) Ltd.