Digital Helps Publicis Weather Worst Of Media Times

Calling the 2009 advertising marketplace "something of a paradox," Publicis Groupe Chairman-CEO said the global agency holding company managed to deliver its relative best, during the worst of times. "While our marketplace experienced a double-digit downturn, we were able to stop the slide and cut it by half, thus actually gaining market share," he said as part of Publicis' full-year and fourth-quarter 2009 earnings release early this morning.

"While the market overall was down by 12% to 14%, Publicis managed to limit the decrease to 6.5%, thereby gaining market share," Levy stated, referring to Publicis' full-year organic revenue growth rate. The rate of erosion declined to only 5.4% during the fourth-quarter, something the agency had predicted.

"The economic environment worldwide was characterized by constant crisis of unprecedented proportions," Levy stated. "In our industry, it manifested itself by a shrinking of the advertising market, which, month after month, caused us to reduce our outlook by as much as 12% to 14%. That left us few options but to manage on a short-term basis, making constant corrections that nevertheless kept us on course to pursue our long-term strategy.

Levy attributed part of Publicis' resilience to its heavy commitment to emerging markets, and especially to its investments and diversification into digital media and advertising services, including its year-end acquisitions of Razorfish from Microsoft.

"Our aim is eventually to derive a total of 60% of our revenue from the two sectors of digital activities and emerging economies," he stated, noted that "digital services" had an organic growth rate of 7.1% during 2009, and that if the negative impact of Publicis client General Motors was factored out, the organic growth rate of digital media would have been 11.9%.

Digital media accounted for 22.4% of Publicis' total 2009 revenues, and Level said Publicis has set a target of 25% for 2010.

"And we have already set a new target, which is to reach - in the coming years - 30%," he added in a question and answer interview transcript released as part of Publicis' earnings statement.

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