Has Publicis Groupe discovered a secret sauce that’s eluding its holding company rivals? Its Q3 2023 numbers showing organic growth of 5.3% (after 7.3% in the previous quarter) look well ahead of any numbers its rivals are likely to post. Growth is slowing in the world economy, with tech clients in particular reining back.
CEO Arthur Sadoun credits this to his “go to market” strategy, which might mean anything. What seems to be the case is that its revenue is neatly divided three ways, as seen here in one of the slides from its recent investor presentation.
Clearly its big $8bn bet on Sapient and Epsilon is paying off, although it needs to after paying those prices. It seems to have been at incorporating them than Interpublic with its big data purchase of Acxiom. WPP has gone the other way, reducing is stake in Kantar to 40% to pay down debt.
If the sector as a whole doesn’t show growth investors are likely to ask what’s wrong. On the one hand the ad holding companies monopolise many areas of ad communications despite the efforts of smaller outfits like S4 Capital, Stagwell, Brand Tech Group and the still numerous array of independents. They’re so big they’re almost unavoidable for many clients.
At the same time they seem to give the ad industry a bad case of constipation: blocking anybody who tries to do things differently.
Accenture Song looks like the only outfit with the firepower to challenge ($14bn in revenue reportedly) although it lacks media, which is where most of the ad holding company growth is coming from.
It’s hardly healthy despite Publicis’ recent performance (it’s been tops for a few years now.) The industry clearly needs a big shake-up. But where’s it coming from?
from Digital Marketing Education https://ift.tt/X1fuWRM
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