Publicis Groupe SA reported better-than-expected sales growth last quarter after the company’s pivot to data analysis and digital-focused marketing helped counter pressure on traditional media spending.
(Bloomberg) — Publicis Groupe SA reported better-than-expected sales growth last quarter after the company’s pivot to data analysis and digital-focused marketing helped counter pressure on traditional media spending.
Net revenue was €3.08 billion ($3.4 billion) in the first quarter, the Paris-based advertising giant said in a statement on Thursday. That compared to the average €3.01 billion estimate from analysts surveyed by Bloomberg. Organic growth accelerated to 7.1% compared with analysts’ 4.4% estimate.
Publicis is building up its data and technology unit — which includes the Epsilon and Publicis Sapient businesses — that has been driving growth. The operation, which now accounts for about a third of the company’s revenue, specializes in data analysis and helping clients work through digital strategies, such as adding e-commerce capabilities.
“Our differentiated revenue mix, with one third in data and tech, allowed us to grow faster than both the industry and the global economy in the last three years,” Chief Executive Officer Arthur Sadoun said in a statement.
The company said it believes it will hit the “top half” of its target for 3% to 5% organic growth for net sales for the year.
On Tuesday, US peer Omnicom reported adjusted earnings per share for the quarter that beat analyst estimates. British ad group WPP Plc said in February that it expects revenue, excluding pass-through costs, to grow as much as 5% this year, which beat analysts’ estimates at the time for flat sales.
“Despite growing anxiety about a recession, inflation and surging interest rates, ad agencies have been relatively resilient by improving client offerings and boosting digital exposures,” Bloomberg Intelligence analyst Geetha Ranganathan wrote in a note after Omnicom’s results.
Going forward, Sadoun said he plans to use technologies such as ChatGPT to help create campaigns. Publicis struck a deal with OpenAI in the second half of last year, though the company is already using AI in its Sapient business to refresh data on consumer purchases “every nanosecond,” he said on a call with reporters.
ChatGPT “allows us to adapt a version of a single campaign to different persons,” Sadoun said, stressing that the technology was used in a way that respects the privacy of customers.
Publicis shares rose 0.5% to close at €76.78 euros in Paris trading on Wednesday and have risen 29% so far this year.
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