Publicis Groupe got back to positive organic growth in Q1

Strong performance in North America, as well as its digital and data operations, helped the company beat its expectations.
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After a year of revenue declines, Publicis Groupe has beat its own expectations and returned to positive organic growth during its first quarter.

For the three months ended March 31, reported growth was down 3.6%, though that was largely due to exchange rates in the U.S., its largest market. On an organic basis, revenue grew by 2.8%, largely attributed to ongoing strong performance in North America and the U.S.

Organic revenue in North America grew by 4.7% year-over-year in Q1; Publicis Groupe did not break out Canadian results, but did detail its performance in the U.S., which makes up 60% of the company’s revenue. While revenue from creative was flat, the company says it is sequentially improving from previous quarters. Traditional media was also flat, but there was a double-digit increase in digital media.

The top performers were those that have been able to tap into shifts towards ecommerce, digital and direct-to-consumer. Publicis.Sapient had a double-digit increase due to ramp up of new business won in previous quarters, as well as expanding scopes with existing clients, while data division Epsilon was up 4.7% thanks to a plan to cross-fertilize its capabilities with other divisions, as well as increases in digital media, data management and the beginning of recovery in the automotive sector.

Across the company, Epsilon continues to be pointed to as a key part of its future growth plans. That still includes efforts to be the “preferred partner” for clients’ transformation efforts to reinvent their businesses, manage costs and drive outcomes, but now is also relevant when it comes to helping them adapt to a cookie-free future. Last week, Publicis Groupe announced that Epsilon’s Core ID would be integrated with The Trade Desk’s UID 2.0, one of the leading non-Google targeting alternatives being developed.

Across the company, healthcare revenues were up 24%, continuing the category’s momentum, but some struggling categories have also creeped into the positive: retail revenue was up 5%, while automotive was flat at 0%.

Despite ongoing uncertainty, the company expects organic growth to be between 8% and 10% in Q2.

Looking forward, Publicis Groupe says the office will be its “primary workspace.” While that doesn’t preclude some or significant time working from home, the company said there was “an urgent mental health need to reconnect in person” after a year of talent working largely in isolation. The company said offices will only open once they can meet local health regulations, and the return to office processes would be assisted by its Marcel AI productivity platform, which was also used in the transition to working from home.