Publicis forecasts ad revival

08 September 2009

PARIS: Maurice Lévy, ceo of Publicis Groupe, says the advertising market has begun to take a turn for the better, with his company's like-for-like revenues improving in both August and September. "I believe the worst is behind us," Lévy said in an interview with Dow Jones Newswires.

Lévy's prognosis is in stark contrast to rivals WPP Group and media buyer Aegis, which have both cautioned recently that they don't expect an improvement until next year.

Aegis' profits were almost wiped out in the first half of 2009, while the much larger WPP saw its first half profits fall by 40% to £179m, and last week had its debt downgraded by credit agency Moody's due to falling sales and concerns over the debt-financed acquisition of market research firm TNS in 2008.

"Even though growth isn't back yet and the market is still down, we are doing less badly than our competitors," Lévy said. "We have evaluated the consequences of the crisis earlier than others and prepared ourselves, which allows us to take initiatives."

The company, which owns Saatchi & Saatchi and Leo Burnett, as well as 49% of Bartle Bogle Hegarty, recently acquired digital agency Razorfish from Microsoft, as well as signing a five-year media buying arrangement with the software giant.

"We have a very simple strategy that revolves around digital and emerging countries and if there are any opportunities we will look at them with interest," Lévy argued.

Publicis' ceo also said improvements in the automotive and financial sectors have played a big role in Publicis' improved revenues over the summer, although he cautioned that car scrappage schemes in France and elsewhere have played a major part in this. Publicis handles Renault and some duties for General Motors.

Unlike many other commentators, including Steve Ballmer, ceo of Microsoft, Levy also believes the advertising market will eventually return to pre-financial crisis levels.

"I don't think we will see double-digit growth for a long time but I think we can expect to see mid-single-digit growth in about two to three years," he said.

Data sourced from Wall Street Journal; additional content by WARC staff