Publicis Groupe’s data and tech bets pay off with strong growth

Agency holding firm Publicis Groupe recorded 10% organic growth in 2022 and a strong end to the year, led by its data and technology capabilities, which now represent a third of overall revenues. Inflation hasn’t dragged on the company, which said it doesn’t have plans to cut back on hiring this year. 

Looking ahead, the holding company sees itself as well-positioned for further growth in areas like connected TV and retail media through its ability to offer data-driven personalization and media at scale, said Arthur Sadoun, chairman and CEO, during a conference call with analysts. For retail media, in particular, Publicis expects CPG companies to spend more in this channel than on linear TV by 2025 and reports that retail media platform CitrusAd, which it acquired in 2021, has since doubled in size. 

“[Retail media and connected TV are] two booming areas where our clients need data on one side to personalize and scale because they still need to reach a lot of people,” Sadoun said on the call. 

The growth stands in contrast to the major digital platforms like Facebook and Google, which are experiencing slowing growth. 

AI in the service of marketing

Sadoun also addressed the role of AI in marketing, which has seen renewed interest since the debut of ChatGPT. The exec said clients aren’t asking for the tool, in answer to a question. Where AI is currently of benefit to Publicis is by enabling it to optimize Epsilon’s transactional data in real-time so clients can understand their customers better, he added. 

“AI can be at the service of modern marketing, but AI can’t be modern marketing in itself,” Sadoun said. “It will make absolutely no sense. You still need the strategic and creative mind to make things happen.”

The company also outlined a number of significant acquisitions, including Bucharest-based software engineering company Tremand, e-commerce intelligence platform Profitero, digital product consultancy and technology focused on China and Asia Pacific Wiredcraft, and Dubai-based cloud solutions company Changi Consulting.

Sadoun said these moves positioned Publicis Groupe for the future and that he did not foresee any major additions in the future, in the call with analysts.

“Our transformation, all the efforts we have to make in terms of organization, in terms of investment, in terms of repositioning, in terms of changing the management is behind us,” Sadoun said.

Digital strength

For 2022, Publicis Groupe reported net revenue of $13.5 billion (12.6 billion euros), up nearly 20% from 2021. In Q4, net revenue increased 18% year-over-year while organic growth came in at 9.4%. 

Organic growth was up 10% in 2022, compared to 2021, led by digital-forward divisions Epsilon and Publicis Sapient, which were up 12% and 18.5%, respectively, for the year. The Groupe’s media and creative operations also demonstrated double-digit and mid-single-digit organic growth, respectively. 

Regionally, the company’s net revenue in North America was up 23.6% on a reported basis in 2022, thanks to a significant positive impact on the U.S. dollar to Euro exchange rate. On an organic basis, the region grew by 10%, led by strong organic growth for Epsilon and Publicis Sapient in the United States. Net revenue in Europe grew 13.6% and Asia Pacific’s net revenue grew 13.3%. Revenue in the Middle East and Africa region was up 18% and the Latin America region reported 19% revenue growth.