PARIS: Clients face a series of challenges, ranging from pressure to cut costs, to brand trust, and that means holding companies must transform themselves “drastically”, the chairman and CEO of Publicis Groupe has warned.

Speaking to The Drum shortly after the world’s third-largest advertising group reported better-than-expected first quarter results, Arthur Sadoun predicted that the industry has to reconfigure because “it can’t stay as it is”.

“Nobody should’ve waited to see what has happened at WPP to realise that yes, holding companies need to transform drastically,” he said, in reference to the sudden resignation of Sir Martin Sorrell as WPP chief executive the weekend before last.

“There will be a change and holding companies, as they are structured [now], won’t be able to make it,” Sadoun added.

“It’s normal – look at the market. Everything has changed around us. The consumer has changed, the media landscape has changed, our clients have changed. Of course we need to change the way we operate.”

Publicis posted organic revenue growth of 1.6% in Q1 2018, taking its net revenue to €2.08bn, and Sadoun attributed this “good growth” to the company’s transformation plan.

This includes the “Power of One” model, which aims to simplify multiple services into a one-stop shop for clients. “This model is resonating everywhere because every one of our clients knows they have to transform,” said Sadoun.

Publicis has also developed a “Sprint to the Future” strategic plan, which involves cost savings coupled with small-scale acquisitions of firms specialising in data, creativity and digital transformation.

In addition, the company has spent the past year developing an artificial intelligence platform, called Marcel, which Sadoun said was part of the group’s plan to shift “from a holding company to a platform”.

Full details about Marcel’s capabilities will be unveiled at a special three-day event in Paris on 24 May, which Publicis regards as a suitable replacement for the Cannes Lions.

Sadoun reinforced his message that the industry must transform itself in a separate interview with Adweek, in which he said data, dynamic creativity and digital business transformation, coupled with one-to-one consumer engagement at scale, will be game-changers.

“What really matters is putting together the agency of the future to work with the client of the future so they can transform, which most of them are starting to do,” he said.

“No doubt our clients have a need to transform, which is why we are on a ‘Sprint to the Future’, to bring them really what they want which is, in the end, one-to-one consumer engagement at scale.”

Sourced from The Drum, Adweek; additional content by WARC staff