Publicis Groupe sees faster recovery as organic revenue rises

Publicis Groupe SA reported a 17.1% increase in organic revenue in the second quarter, joining competitors in reporting significant growth during the terrible second quarter of last year, when advertisers halted spending amid uncertainty caused by the coronavirus pandemic.

During the same period last year, the Paris-based company reported a 13% decline in organic revenue, a common metric that eliminates the effects of currency fluctuations, acquisitions and divestitures.

Growth in this year’s quarter was largely driven by the US and Asia, where organic revenue increased 15.2% and 13.6%, respectively, the company said. Data and digital marketing companies were the top growth drivers in the US, with data company Epsilon generating a 31.1% increase in organic revenue and digital marketing and technology agency Publicis Sapient registering an increase of 27%.

Publicis said it is updating its guidance to reflect its recovery from the pandemic one year ahead of schedule. The company expects to achieve organic revenue growth of 7% per year and an operating margin of 17%, assuming there is no significant deterioration in health, he said.

The company, which owns ad agencies like Spark Foundry, Saatchi & Saatchi and Leo Burnett, follows competitors Omnicom Group INC.

and Interpublic Group of Cos. reporting second quarter results reflecting a large improvement in organic revenue compared to the prior year, when the pandemic led to pauses in customer spending and layoffs at ad portfolio companies.

The company, which exceeded revenue expectations, according to FactSet, attributed its performance to the improving global economy and the strength of its digital and data operations, which are key for clients to direct their investments towards data management, digital media and commerce.

Publicis announced last week the acquisition of CitrusAd, a software company that helps brands improve their marketing performance on retailer websites.

Net revenue, a metric that eliminates transfer costs, such as production media and expenses that can be re-invoiced to customers, increased 10.7% year-on-year in the second quarter to 2.5 billion euros, which equals $ 2.95 billion.

Write to Alexandra Bruell at [email protected]

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