French ad giant Publicis has announced plans to save €500 million in costs by cutting salaries and halving dividends, while at the same time accelerating the rollout out of its AI platform, Marcel, in the US. 

The world’s third-biggest ad agency network blamed COVID-19 for declining revenue, Bloomberg reported, as it brought forward its results for the first quarter. Sales were down 2.9% to €2.48 billion, beating several forecasts, which had predicted falls of between 3.5% and 8.4%.

Savings would be made, the company said, by freezes on hiring and internal promotions, cutting the use of freelancers, and looking at suppliers’ contracts. Chief executive Arthur Sadoun will take a pay cut of 30%, as will Chairman Maurice Levy. Other board members will see pay cut by 20%.

Sadoun said in a statement, “We are all facing a crisis that will be unparalleled in terms of magnitude, complexity and probably length.”

Speaking to The Drum, Sadoun said long-term planning was currently “absolutely impossible” due to the pandemic.

“You need to focus on your priorities, which in our case are: health and safety of our employees, being closer than ever to our clients, taking strong measures to protect our people and our agencies, and then we won’t try to control the uncontrollable,” he outlined.

He agreed clients now needed to forge ahead with digital strategies quicker than ever, but added creativity would be key to retaining brand value.

“If you are not able to justify the premium of your product, it will become very difficult to sell it, and the big difference is that they are going to have to go for something that is more personalised than it has been in the past,” he added.

Meanwhile, one upside for Publicis, Campaign reported, is that its oft-derided AI platform Marcel – a management tool aimed at reinventing how an agency communicates internally – may finally be coming into its own after a US launch last week. The system had been due for a global rollout at the end of June, but COVID-19 has changed all that.

“We’re all working from home – we’re now 80,000 offices,” said Carla Serrano, chief strategy officer of Publicis Groupe and CEO of Publicis New York. “What people require right now is different and what they’re hankering for is different. The people’s needs changed and all of a sudden Marcel was able to be more useful at this time.”

Sadoun clearly believes the employee platform is an industry game-changer. When he spoke at dmexco 18 months ago, he described the real importance of Marcel as being about what it represents. “It’s trying to reinvent our industry,” he said. “I think that hopefully [by 2020] Marcel [can help] to initiate the kind of change we need to see in our industry and at Publicis.”

Sourced from Bloomberg, The Drum, Campaign; additional content by WARC staff