Publicis Groupe SA said Thursday that organic revenue grew 9.4% in the fourth quarter as its data and technology services continued to capture a shift in client spending.
The Paris-based advertising holding company, which owns agencies such as Saatchi & Saatchi, Leo Burnett and Zenith, said brands continued to move spending to tasks like managing first-party data collected from their consumers. It also cited demand for its digital business transformation offerings. The company and its competitors have developed consulting businesses to help clients adapt their businesses digitally, whether it be building apps or developing new e-commerce strategies.
Data and technology services now represent a third of Publicis’s revenue. Publicis and its peers have restructured in recent years to focus more heavily on areas beyond traditional advertising including data and e-commerce services, which could help them handle a downturn better than in the past, marketing experts have said. The company said Thursday that this dynamic of clients shifting their spending into first-party data management, commerce and business transformation has also boosted its creative and media businesses.
Publicis in May said it had 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.
The growth in the quarter ending Dec. 31 brought Publicis’s full-year 2022 organic revenue growth to 10.1%. The results beat the average analyst estimate of 5.3% growth for the quarter and 8.8% for the year, according to FactSet.
Publicis said it expects organic revenue growth of 3% to 5% in 2023. Organic growth refers to the change in net revenue excluding the impacts of acquisitions, disposals and currency fluctuations.
Chief Executive Arthur Sadoun said the company is confident about 2023, despite uncertainty about the macroeconomy.
“Although we have not seen a major change in client behavior when it comes to their spend so far, we do see some traditional marketing spend cuts at the local level here and there, but at the same time, what we see is truly an ambition and a commitment for our clients to continue to invest in their own transformation,” Mr. Sadoun said.
Publicis Group CEO Arthur Sadoun.
Photo: Joel saget/Agence France-Presse/Getty Images
Tim Nollen, a senior media tech analyst at Macquarie, said in a research note in January that the firm was raising its estimates for 2023 organic revenue growth at Publicis and its competitors Interpublic Group of Cos., WPP PLC and Omnicom Group Inc.
He acknowledged concerns about a potential recession but said current economic conditions are different from those in past downturns. “This is not a dot-com bust, financial crisis, or pandemic, and inflation is actually good for advertising while unemployment is low,” Mr. Nollen said. He said consumers are spending more during periods of inflation, so brands are spending on marketing to reach them—and with low employment, more people have more money to spend.
Agencies are in greater demand to help manage areas such as the complexities of data and information technology, privacy regulation and automated ad buying, Mr. Nollen added.
“A quarter or more of agency revenue comes from such nontraditional activities,” he said. “Ad agencies have restructured themselves to meet this new world.”
Publicis reported net revenue of 12.57 billion euros for full-year 2022, equivalent to $13.86 billion, up 19.9% compared with the prior year. Net income attributable to Publicis was €1.22 billion for the year, up 19% from a year earlier, while earnings per share were €4.82, up 16.7%.
Net revenue in the fourth quarter 2022 was €3.46 billion.
Write to Megan Graham at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
