Publicis extends winning streak as data-driven services provide windfall

Dive Brief:

• Publicis Groupe experienced another run of growth in the third quarter, with organic revenue up 5.3% year-over-year, according to an earnings statement. 
• Strong performance led the ad-holding company to raise its full-year guidance, the second time it has done so this year. The firm now expects organic growth in the range of 5.5% to 6% in 2023.
• The agency network and its peers are contending with ongoing macroeconomic headwinds, global strife and a renewed back-to-office push. Many are eyeing emergent technology such as artificial intelligence (AI) and retail media as a way to attract new business.  

Dive Insight:

Publicis extended an impressive winning streak in Q3, delivering results that came in above analyst expectations. The ad-holding giant showed strengths across key regions, with organic revenue up 10.7% in Europe and 3.8% in Asia-Pacific. While North American revenue grew just 3%, Publicis pointed to “very solid” U.S. gains of 3.2%. 

The French firm has attributed its wins to a Power of One strategy that seeks to streamline offerings for clients as well as its bets on future-facing tech like AI. The tech has emerged as a competitive battleground for agencies, which see automation’s potential not just to reshape creative work but also operational efficiency. 

Epsilon, a data-marketing company Publicis acquired in 2019, has also continued to attract interest as the industry grapples with the deprecation of third-party cookies and other identifiers. The unit posted 10.5% organic growth in Q3. Meanwhile, media accounted for a third of revenue over the period. Kimberly-Clark, which markets household brands like Cottonelle, Kleenex, Huggies and Scott, recently picked Publicis to handle its U.S. media-buying and planning duties, which could provide a future boost. 

“Our media capabilities, which continued to gain market share, and Epsilon’s data offer were the main drivers of [our] performance, achieving high single-digit and double-digit growth respectively,” said Arthur Sadoun, chairman and CEO of Publicis Groupe, in a statement attached to the earnings release.

Publicis has been leading the pack on performance among the global agency networks in 2023. Large agencies mostly fared well earlier in the pandemic, when demands for digital transformation were high, but the category picture has grown uneven in the face of ongoing inflationary pressures and client spending pullbacks in verticals like tech. Global conflict has also shaken the business, though the impact of Israel’s war with Hamas isn’t immediately clear. Brand marketers, who have already been prudent with their budgets in 2023, can pump the brakes on splashy campaigns in times of strife to avoid coming across as tone-deaf. 

Like rivals, Publicis is also pushing to get employees back into the office. Beginning in January, the company is mandating staff return to work three days a week in person, with mandatory attendance on Mondays and no consecutive days allowed for remote work.