Publicis Reports Surprising Growth, Prepares For 2009 Street Brawl On Madison Avenue

Madison Avenue's major agency holding companies are beginning to report full-year and fourth-quarter 2008 earnings results and updated guidance for 2009, and it is becoming apparent that ad agencies are bracing for an unprecedented share battle. At least that was the picture painted by Publicis Groupe chief Maurice Levy in this morning's earnings release and in his comments with journalists following the Paris-based holding company's relatively healthy fourth-quarter 2008 results, just as the cataclysmic economic crisis was beginning to manifest in earnest.

Publicis reported a 1.1% gain in organic growth, and a 5.5% rise in total revenues during the fourth quarter, beating the rest of the market by a significant margin. Levy estimated that the overall advertising sector declined 7.4% during the fourth quarter of 2008, noting that Omnicom on Tuesday reported a 7.0% decline.

In the earnings statement, and in comments to analyst and reporters, Levy indicated Publicis would be taking its gloves off to take a bigger slices of Madison Avenue's shrinking revenue pie, and that its chief weapon would be to capitalize on its leadership in digital media and marketing services.



"We are entering 2009 with great serenity and serious-minded, ready to provide our clients with the most innovative, the most creative and the most effective solutions. This is the year to win market share and consolidate our margins," Levy said in the official Publicis statement. Later, he told Reuters that Publicis would "fight on the corner of every street for business."

Over the past year, and especially toward the end of 2008 and early this year, bragging rights over digital marketing dominance have been a key theme among agency holding company chiefs, as client, investor, and press attention has re-shifted toward the digital economy. WPP chief Martin Sorrell has especially challenged Publicis' dominance in digital media, asserting WPP's superiority in public speeches and interviews, but Publicis reported that digital now comprises 19% of its total revenue, up from 15% in 2007, and that online media specifically now represents at least 10 cents of every media dollar purchased by a Publicis agency.

Levy also touted the innovations being spawned by the VivaKi organization it launched last June, which combined elements of Publicis Groupe Media and Digitas to develop more efficient internal systems, and to leverage its position in technology and with outside media vendors. In its short life, ViviaKi already has structured a new "audience on demand" system leveraging the user targeting capabilities of Google, Yahoo and Microsoft, and has created a suite of tools in its ViviaKi Nerve Center that have established the most systematic means of planning and buying social media campaigns of any major player on Madison Avenue.

"2009 will be very difficult, with an estimate of global GDP growth of 0.9%," Levy cautioned in the Publicis earnings statement. "The most recent forecasts (ZenithOptimedia) report negative growth worldwide in advertising expenditure of 1.8%," which he indicated to reporters might actually be revised, projecting the global advertising marketplace now looks like it will decline as much as 3% in 2009.

Next story loading loading..