The French-owned advertising and media giant Publicis Groupe has reported a slide in worldwide revenues for the third quarter.
This is despite a recent major spending cut on its awards and marketing budget the revenue statement said, which didn’t break out costs, profit or EBITDA, that the company’s income had shrunk from US$2.7 billion to US$2.6 billion year-on-year in Q3 – a fall of 2.2 per cent.
However, organic sales at the end of September rose by 1.2 percent on an organic basis to US$2.67 billion following a 0.8 percent rise in the second quarter.
The agency cited the falling euro exchange rate as being the main factor in the revenue drop.
Meanwhile, Asia-Pacific experienced a 1 per cent slide in revenue and a 2 per cent dip in organic growth for the first nine months of 2017.
In the group’s report, Publicis said business in China only grew by 0.4 per cent due to “difficulties at one entity under strategic review”, although further details of which agency this referred to were not disclosed.
Elsewhere, business grew by 9.5 per cent in Singapore, while in India, Publicis said the situation was “consolidating”, with the third quarter seeing growth of 3.9 per cent.
Over the last 18 months, Publicis Groupe has famously gone through a major global restructure, dubbed by the-then CEO Maurice Levy as ‘The Power of One’. Aimed at streamlining its agencies, the reorganisation has been carried on by Levy’s successor, Arthur Sadoun.
However, the holding company has faced difficulty earlier after having to write down US$1.5 billion off its digital transformation business Publicis Sapient.
Then, during Cannes this year, Sadoun announced the company would take a one-year break from entering awards and attending trade shows in order to finance its new artificial intelligence-powered professional assistant platform named Marcel.
In a statement on the third quarter results, Sadoun said: “Over the course of the summer the financial markets were exposed to a negative news flow regarding our industry. But the truth is that there is nothing new there. We all know that our industry is facing many challenges. Consumer behaviour is changing, the media landscape is being disrupted, we are confronted with new competition and our clients have been facing challenges around growth, cost and brand trust challenges for years.
“At PublicisGroupe, we decided that to rest on our laurels was not an option and we committed to transform for the better in an ambitious and consistent way.”
Speaking about the digital transformation business, he added: “With the acquisition of Sapient, we have put technology at the core of the business transformation of our clients… For the last four months, we have been accelerating the execution of our plan by shifting our model from a communications business to a transformation partner by building our organisation as a platform and putting our people first.
“We are beginning to see the fruits of these efforts, but we know we are only in the middle of our transformation journey, as it is a profound change, in a highly volatile market. That is why, even though we have some preliminary encouraging signs, we remain very cautious and determined to win.”