The day after Publicis Groupe released its 2018 financial results, Groupe leaders held an earnings call with investors to address its disappointing organic growth and "higher than expected" client attrition.
But investors weren’t assuaged and sent the company’s stock tumbling for a second straight day. In mid-afternoon trading on the Paris exchange it was down 14%.
“We expect a tough Q1,” admits Arthur Sadoun, Publicis Groupe chairman and CEO, during the nearly two-hour analyst call.
To be clear, Sadoun explains, “I am not talking about client loss -- we have great client relationships, but rather they are shifting or cutting their traditional ad budgets.”
"We are still experiencing some headwinds but we are confident about our future," says Sadoun, outlining several key priorities to counteract current "business challenges."
For one, the Groupe underscores yesterday's announcement to "scale up its game changers" — data, dynamic creativity, and business transformation — by adding to Steve King's management responsibilities. In addition to his current role of CEO, Publicis Media, King will now add chief operating officer responsibilities to build the Groupe’s transformation model consistently across all the Groupe’s operations and countries.
Likewise, Nigel Vaz is elevated from CEO Publicis.Sapient, EMEA/APAC to global CEO Publicis.Sapient to be responsible for further development of the business transformation industry verticals in automotive, consumer products, energy & commodities, retail, financial services, health, media & telecom, and travel & hospitality. There is still no word on Vaz's replacement.
Sadoun himself plans to become more closely involved with select clients by working closely with new hire Ros King, executive vice president global clients, as well as his top leaders like creative head Nick Law and current Sapient CEO Alan Wexler, who is moving to chairman to help transition clients to this more ambitious business transformation model.
“We need to put data at the core of the relationship and shift from linear to dynamic creativity,” says Sadoun. "We should not put every client in the same basket. We are adjusting our structure to meet their needs."
The Groupe will also expand its single country operating model across all markets beyond the current eight markets.
“Every company will undergo this transformation, but we are the only ones that offer the convergence of business and marketing transformation to build the platforms that deliver creative and media,” he says. “It is easy to announce a win, but what matters more is having an impact that demonstrates we will have an impact on a global scale.”