Publicis Calls Lang Exit 'Unfortunate,' Unveils Digital 'Transformation' Plan

Globally, Publicis Groupe’s digital business now accounts for about 30% of the holding company’s revenues. But in the U.S., that figure is much higher -- about 50%, according to company CFO Jean-Michel Etienne.

Speaking at the UBS Media & Communications Conference Tuesday, Etienne said that given the huge investments the company has made in digital communications to service its clients' marketing needs, it’s critical that the company have what he termed a “coordinated strategy” in that space. The share of digital-related revenues will continue to escalate, he added.

That, coupled with the departure of one of the Groupe’s key digital executives -- Laura Lang, the global CEO of Digitas, who is headed to Time Inc. -- is why the company unveiled plans to rethink its digital strategy and created a so-called “Digital Transformation Team” to come up with a game plan, Etienne said.

Etienne described Lang’s departure as “unfortunate.” Looking for a way to “rebound,” the company decided to create the transformation team as a way to revisit the company’s digital strategy and make adjustments where necessary.

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Publicis’ media management arm VivaKi confirmed on Monday that Bob Lord, CEO of Razorfish, would convene the new team that is tasked with formulating digital strategy recommendations that are due sometime in the first quarter of 2012.

Lord was also named to take over Lang’s management duties, which included overseeing Digitas as well as Big Fuel, Denuo and mobile specialist Phonevalley. Lord also retains his Razorfish responsibilities, although the company intends to hire a replacement for Lang once the new digital strategic vision is set in place.

At the UBS conference, Etienne said the transformation team’s agenda includes proposing plans for the acceleration of digital revenues outside the U.S., “where we should do much more.”

Etienne also indicated that the company has a corporate plan in place to help underperforming assets improve operating profit margins. The company has compiled a list of more than 180 “entities” that are being closely monitored and restructured if need be to spur improved margin performance.

The company has so far not provided official guidance on how it expects to perform in 2012. Etienne did indicate that the company believes it can achieve organic growth that exceeds global ad expenditure growth projected by subsidiary ZenithOptimedia next year of 4.7%. By contrast, current analyst consensus for the company’s 2012 organic growth is between 2% and 3%.

Etienne attempted to manage expectations for organic growth in the current quarter, noting that it will be less than the 12.5% achieved in the fourth quarter of 2010, which he described as a “tough comparable.” 


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