Publicis Expresses 'Regret,' Sour Grapes Over GM Loss, Says It Was Only 0.5% Of Its Business
Starcom’s loss of General Motors’ media services account represents about 0.5% of parent Publicis Groupe’s total annual revenues, according to a disclosure made in a quarterly earnings report issued this morning by the Paris-based agency holding company.
Publicis, which owns Starcom MediaVest Group, ZenithOptimedia Group, Digitas and other agencies, said Starcom’s contract with GM officially ends in June, at which time GM will consolidate its entire global media services account with Aegis Group’s Carat unit.
“Publicis Groupe regrets GM's decision but is proud of the very high level of professionalism Starcom brought GM over the years,” it said in a statement, adding a bit of sour grapes, “More generally, Publicis Groupe is proud of the support it gave this large account in recent years and particularly during the serious difficulties that had to be overcome when GM went bankrupt.”
While the GM news doesn’t bode well for Publicis shareholders, CEO Maurice Levy noted that the group is performing relatively well, despite other macro-economic troubles, especially the “sovereign debt crisis” plaguing Western Europe, and the continuing effects of global economic turmoil.
Despite those factors, Publicis reported a 7.3% growth in its total 2011 revenues, or an organic growth rate of 5.7%.
Publicis emphasized that digital marketing services now represent 30.6% of its total revenues, up from 28.0% in 2010, reflecting an aggressive digital agency acquisition strategy.
Publicis also unveiled what it described as a “friendly takeover bid” of Pixelpark, an independent digital shop headquartered in Germany. The offer, which was made by Publicis’ German subsidiary, MMS, represents a 28% premium over Pixelpark’s current share price, but it did not disclose the number of shares being acquired, or what the total value of the acquisition would be.
Publicis said the offer was contingent on acquiring at least 75% of the current shares of Pixelpark, and noted that the deal would be subject to German regulatory approval.
Publicis said Pixelpark's core businesses range from “the creation of digital brands, consulting, content management, the social media, mobile marketing, eBusiness solutions and data analysis and management.”
Publicis, which is the parent of digital and media agencies such as Digitas, Starcom MediaVest Group and ZenithOptimedia Group, has been on a digital acquisitions tear, and earlier this month acquired Flip Media, one of the large digital agency networks in the Middle East.
Earlier this year, it acquired France’s Mediagong, and Russia’s The Creative Factory.