Arthur Sadoun: Publicis In For A “Bumpy Ride” After Unexpected Downturn In US Ad Spends

Arthur Sadoun: Publicis In For A “Bumpy Ride” After Unexpected Downturn In US Ad Spends
B&T Magazine
By B&T Magazine
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Publicis Groupe has warned of a challenging 2019 after a sharp downturn in spending by American FMCG clients.

Company CEO Arthur Sadoun had predicted a stellar year for the Paris-headquartered ad giant which he said would be due to a “disproportionate share of new business wins”.

However, overnight it was reported that Publicis’ revenues had fallen 0.3 per cent despite predictions of a 2.5 per cent gain.

The company had planned for four per cent growth by 2020 primarily from its media agencies Starcom, Zenith and Mediavest.

“We clearly have a revenue attrition on traditional advertising from fast-moving consumer goods in the United States,” Sadoun told the business site Bloomberg.

In a statement, Publicis said: “We have begun 2019 with optimism even though we expect a bumpy ride in the first quarter due to the prolonged effects in the first months of the year of the FMCG client attrition of Q4 2018.

“However, the ramp-up of the significant accounts won towards the end of 2018 should lead to improved organic growth as of the second quarter,” it read.

Publicis’ share price is expected to take a nasty hit when the markets open in Paris today. And the news appears to be having a ripple effect with Omnicom’s share price down as much as 5.3 per cent in New York yesterday, while Interpublic Group has lost 5.6 per cent.

In a wide ranging interview with UK industry site Campaign, Sadoun has likened the current advertising environment to what the music industry went through 15 years ago.

“The question is: how fast can we shift our model from selling CDs to becoming a streaming platform? The equivalent of streaming services in our industry is without a doubt personalisation at scale. Advertisers are at a loss with the evolution of media and the speed at which change is happening,” Sadoun said.

He then added: “Honestly, my job is tougher than I expected, but I wouldn’t change places with anyone. And I am convinced that we are building the model of the future, despite the headwinds and the pessimism we are encountering.”

 

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