Despite AI Skeptics, Early Adopter Arthur Sadoun Says No One Is Laughing Now

Publicis has started 2023 just like it ended 2022, posting organic growth of +7.1% in Q1 which followed full-year 2022 growth of 10.1%. CEO Arthur Sadoun tells Adweek the company has more room to grow, predicting 3%-5% growth for the year ahead. Much of the growth came from digital consulting business Sapient (+11%) and from outcome-based marketing arm Epsilon (+10%) which contributed to the 5.8% increase in revenue in the U.S. and 12.3% across Europe. Combined, the two companies, which employ about 30,000 tech and data specialists, make up around a third of Publicis’ revenue. The network also overtook U.S. rival Omnicom's reported revenue figure of $3.4 billion for the first quarter, with Publicis reaching $3.7 billion. The growing opportunity in China The reopening of China following its long-standing Covid-19 restrictions led to organic growth in the country of +3.7%. “China is not a very big market for anyone, but it is the number two market for most of our clients,” Sadoun said. Seeing Accenture sending a press release even before Annette resigned formally is the first for me.—Arthur Sadoun, chief executive and chair, Publicis Groupe The company won media contracts with PepsiCo and Uniqlo in 2022, and added Shanghai-based Wiredcraft to the portfolio to help scale digital transformation capabilities in the country. Publicis also works with global clients such as McDonald’s and L’Oreal offering its data and technology services. Leadership hires in recent months in China include Jessica Zhang as chief executive of media agency Starcom and Jane Lin Baden as chief executive of APAC. “We see China and Asia accelerating in the next quarters. We have an outstanding team, we have the best capabilities of the market, we are number one in new business, and we are the only one really growing in the market,” he continued reflecting on Omnicom’s Q1 results which revealed 2.8% quarterly growth in Asia Pacific. The future for the U.K. In the U.K., which saw organic growth of 24% largely due to the performance by Sapient, Sadoun addressed the resignation of the country’s chief executive Annette King who, for the moment, will not be replaced directly. King is set to join Accenture Song as its global communications lead. Kickstarter Taps Ex-Twitter Talent to Help Put Itself Back on Cultural Map “Seeing Accenture send a press release even before Annette resigned formally is the first for me," Sadoun said, adding, "I have never seen that in this industry before." King's departure will not affect the country model operation, Sadoun said. He highlighted the core group of chief executives working in the U.K. including Sapient’s global CEO Nigel Vaz, global chief client officer Magnus Djaba, who oversees all global clients and is responsible for BT in the U.K. market, as well as global chief creative officer Chaka Sobhani at Leo Burnett. However, he admitted that the role could be reintroduced in the future. “Compared to their size, the U.K. is definitely a place where we have the biggest concentration of talent in the world when it comes to Publicis," said Sadoun. M&A outlook Publicis has been focused on building its digital transformation capabilities in recent years, alongside its retail media output, which is where Sadoun sees continued client demand. In addition to Wiredcraft in China, Publicis also recently acquired London-based tech marketing company Yieldify, Advertise BG in Bulgaria and Practia in Buenos Aires.Sadoun says the most important element of any acquisition is to retain the culture of the business throughout the integration, an issue that is key to the success of influencer agencies. When McKinney Sought to Buy an Influencer Agency, Here’s How It Landed on August United “I am very careful not to make an acquisition that would kill what has made the success of those companies," he said. "I see when it comes to those creator/influencer companies in order to open up on their creativity as much as possible, they are most of the time better be independent.” Publicis’ heritage with AI Referring to Omnicom’s chief executive Jon Wren’s announcement this week of a partnership with Microsoft, Sadoun laughs as he remembers the skepticism he faced when introducing Publicis’ own AI-platform Marcel in 2017, which was developed alongside the software giant. The internal platform has since gone on to help support the running of the agency network internationally, with Sadoun having previously stated that it was key to Publicis’ efforts to organize and communicate with staff during the height of the pandemic. Since then it has also been utilized to support hybrid work and monitor the Work Your World initiative allowing staff to relocate for an extended time to any office within the network. He also claimed that Marcel was aiding the network’s ability to downscale its real estate holdings as well. “It gives us an opportunity to have an AI platform that will allow everyone to continue to collaborate, to continue to provide learning and development and to continue to have some opportunities, despite the fact that we are not physically present five days a week,” Sadoun said.