Publicis growth flat in Q2

Ongoing reduction of traditional advertising spend in North America offsets gains in other areas.
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Publicis Groupe was optimistic in the release of its Q2 and half-year results, though its return to positive growth was somewhat lackluster.

Organic growth across the holding company was flat at 0.1% in Q2 of 2019. The holding company pointed out, however, that this was a return to positive growth after the “bumpy ride” it predicted at the end of last year, citing business wins for Q4 2018 beginning to pay off. Publicis’ Starcom won the Fiat Chrysler media account in North America last December, while pharma giant GSK consolidated its global media business with Publicis in October 2018.

While organic growth was strong in Europe (2.4%), Asia-Pacific (2.7%) and MEA (8.7%) regions in Q2, it was offset by declines in Latin America (8.7%) and North America (1.7%). The company cited ongoing reduction in fees from traditional advertising, particularly in the U.S., for the decline in North America, specifically the CPG segment. CPG clients made up roughly one-third of Publicis’ business in the first half of 2019, though earlier this year, P&G – one of Publicis’ major clients – announced plans to further reduce its agency costs.

Last week, Publicis Groupe announced a restructuring in the U.S., organizing its creative agency brands – such Saatchi & Saatchi, Leo Burnett and Publicis Worldwide – into east, west and central zones. Andrew Bruce, a former president and CEO of Publicis Canada, will be leading the west region in addition to his duties as CEO of Publicis Communications North America. Arthur Sadoun, chairman and CEO of Publicis Groupe, said the company would be “accelerating the implementation” of the country model in the U.S., after similar models in the U.K. and France have helped revenue grow by 4.8% and 3.1%, respectively, in the first half of the year.

Amid the reduction in traditional agency fees, Publicis pointed out that it saw a 24% growth for the first half of the year in its “strategic game changers,” which is how the company is referring to upstream, digital transformation business.

Publicis also used the occasion to point out new business the holding company has won in the first half of the year. Amid several global and U.S.-specific wins, the Publicis Health division picked up several new accounts covering the Canadian market: Abbott (maker of PediaSure, Pedialyte and Ensure), Sunovion Pharmaceuticals (maker of Lunesta) and Alfasigma (maker of Deplin).