• by Joe Mandese , May 3, 2007

Despite healthy new business including MediaVest's Wal-Mart win and strong revenue contributions from newly acquired Digitas, Publicis Groupe this morning reported relatively tepid organic growth for the first quarter of 2007. Noting that those results do not "truly reflect the dynamism" of Publicis' operations, Chairman-CEO Maurice Levy, said the Paris-based agency holding company is projecting stronger organic growth for the year as a whole.

"This very active first quarter brings good news," Levy stated, citing net new business gains of $3.4 billion, as well as the integration of Digitas, which turned in a 16.8% growth in revenues during the first quarter.

Despite those contributions, Pulicis turned in an organic growth rate of just 3% for the quarter, though Levy said it is projected an organic growth rate of 5% for all of 2007.

Additionally, he said Publicis is striving to improve its operating margins via a cost-cutting initiative dubbed "the Horizon program." While he did not disclose details of the cost savings effort, he noted that the integration of Digitas is contributing "exceptional acquisition related costs" this year.

Publicis is the parent of media services networks such as Starcom MediaVest Group, ZenithOptimedia Group and Denuo.

Thanks largely to new business wins from MediaVest, Starcom MediaVest Group is turning in an exceptional year so far. That comes in on top of a very strong 2006. According to revised estimates issued Wednesday by RECMA, Starcom MediaVest Group turned in the best performance of any media network last year and now is the world's largest, with global billings up 17.4% to $25.58 billion. That moved Omnicom's OMD unit to second place with a 2006 growth rate of 7.6% and billings of $24.88 billion.

Publicis' ZenithOptimedia unit also had a strong 2006, turning in a growth rate of 8.3% and annual billings of $19.29 billion, ranking it as the fifth largest media network in the world, just behind Aegis Group's Carat.