Publicis Raises 2022 Organic-Growth Guidance Again

Publicis and its rival companies had previously increased their expectations for growth in 2022, despite global factors including inflation and the consequences of the war in Ukraine.

Chief Executive Arthur Sadoun said the company hasn’t seen a material impact from clients dealing with macroeconomic challenges.

“All of our clients are actually confronted with one, two, three or four major challenges, like inflation, like the supply shortage, like the war in Ukraine,” Mr. Sadoun said. “I think two things might happen. One is, you should expect there might be some budget cuts from [companies] when it comes to traditional marketing. But the second thing….We are not expecting our clients to cut their investment when it comes to marketing and business transformation. We believe that the clients will continue to invest in their own transformation.”

Mr. Sadoun said the company has seen higher demand for offerings such as first-party data management, which refers to the kind of data collected directly by marketers on consumers, as opposed to so-called third-party data gathered by others. The CEO also noted demand for its commerce offerings. Publicis in May acquired e-commerce software company Profitero, which helps brands compare prices with competitors, monitor product availability and track customer ratings and reviews, among other offerings.

“We feel very confident that the model we have built will still be not only relevant, but bring the kind of value that justifies this kind of investment, despite the difficulties we can have in the macroeconomic context,” he said.

Publicis said its organic revenue grew 10.3% in the third quarter from a year earlier. Net revenue rose to 3.24 billion euros, equivalent to $3.19 billion, up 24% from €2.62 billion in the year-earlier period, helped by currency fluctuations and acquisitions. Growth was particularly strong in North America, boosted by the positive impact of the dollar-euro exchange rate, and in Latin America.

Tim Nollen, senior media tech analyst at Macquarie Group, said in a note to clients last week that he expected decent third-quarter earnings reports from advertising holding companies, but was more worried about the fourth quarter and 2023, forecasting that organic growth could turn negative.

Publicis also said it plans to give 45,000 of its employees, roughly half its workforce, a bonus of one week’s salary as they deal with effects of inflation. The bonus will be given to employees who don’t already have one built into their contracts.

“Many of our people are being impacted by inflation at the moment,” Mr. Sadoun said. “And so we thought that with such strong results—even though the year is not over, even though there are some macroeconomic difficulties—it was time to do something for them.”

Write to Megan Graham at [email protected]