Publicis boss on the spot at investor day

Wed Dec 3, 2014 7:25am EST
 
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By Gwénaëlle Barzic

PARIS (Reuters) - Eighteen months after celebrating a corporate marriage with U.S.-based Omnicom OMC.N that was to dominate the world of advertising, Publicis (PUBP.PA: Quote) and its boss Maurice Levy are single again, and face some awkward questions.

Chairman and chief executive Levy on Thursday faces investors worried that clients are deserting the French group and disappointed by a performance that lags the sector. (bit.ly/1yeEhpJ)

The $35 billion Omnicom-Publicis pairing would have overtaken WPP (WPP.L: Quote) as the world's biggest advertising company. It fell apart over leadership conflicts and delays to tax and antitrust approvals.

Investors want to see the rebound Levy has promised.

"The only credible response will be a return to organic growth in 2015. That will need to be visible in the figures. The most important thing is to stem client losses, at Razorfish in particular," said Conor O'Shea of analyst Kepler Cheuvreux.

Razorfish is Publicis' digital advertising arm making ads targeted at the Internet, which is the industry's growth area.

But online giants like Google are moving to cut agencies out and capture ad spending directly, hitting players like Razorfish, which has lost business from clients including Motorola and Blackberry.

Levy has blamed his company's problems in part on an over-enthusiastic focus on the merger, but Publicis' organic growth was just 1 percent in the third quarter of 2014, while ex-merger partner Omnicom managed 6.5 percent.   Continued...

 
Maurice Levy, Chairman and Chief Executive Officer of Publicis Groupe, attends the company's 2013 annual results presentation in Paris, February 13, 2014.   REUTERS/Gonzalo Fuentes