EuroBusiness Media (EBM): Publicis Groupe, the world's third largest communications company has just published its revenue figure for the third quarter of 2015, I have the pleasure of discussing those with the company's CEO. Maurice Lévy, hello. First of all, you’ve announced a organic growth that is probably not at the levels that you had liked. Could you comment on that for us?
Maurice Lévy: So, let's have a look at the whole picture. If we look at the absolute numbers, we have some staggering numbers thanks to the acquisition of Sapient and the fact also that we are benefitting from the exchange rate ratio which are favourable to the euro, for once, so happily we are benefitting from that effect. So, we are posting, in absolute numbers, an increase of our revenue of 33%. Where we have a difficulty is on organic growth, which is a very bold measure in our industry. And unfortunately it's not at the level we were expecting it to be. And the main reason for that is not a loss of clients – we have not lost anything which is significant – it is simply a collection of small decisions made in some sectors by some clients which have been either postponing some campaigns, cutting some expenses or investment, and therefore the month of September which should normally have been a very good month with a very good level of growth, has been with zero growth. Zero. And this has had an impact on Q3.
EBM: You mention Sapient which had had a negative revenue growth for the first half of the year. What can we say when we look at Q3 particularly?
Maurice Lévy: So, Sapient has been affected and impacted by the oil price and by some clients who have stopped investing during the first half. As we expected, Sapient is back to growth at a very good level. The Q3, it's in total at the level of circa 5% and this is true for SapientNitro as well as Sapient Consulting. So we are very pleased with the numbers of Sapient. And we are also extremely pleased with the integration.
EBM: And tell us a bit more about how the integration is going.
Maurice Lévy: Integration is something which is extremely interesting because we are learning more about Sapient and what Sapient can bring to our clients. And we are discovering opportunities which are much bigger than what we thought at the beginning. Even if it is requiring a much harder work to get those opportunities materialising. So what we are seeing from Sapient is three things, which I believe are full of promises for the future. The first one is that the opportunities are much bigger. The second is that our clients love it and they like what Sapient is bringing to the party. They like the platform. They like the e-commerce capabilities. They like the technology aspect of Sapient and the fact that Sapient can bring that technology and this digital at the core of what we are doing for our clients. So integration with Sapient is something which will generate a very, very good opportunity for the future. And the last but not the least, is that the synergies of cost are better than expected. All this is going very smoothly and to the satisfaction of everyone. So we are very, very pleased with the acquisition and the way integration is progressing.
EBM: Could you give us an update on the media reviews that have taken place since April 2015?
Maurice Lévy: Yes, what some journalists have called "Mediapalooza". Journalists, analysts were thinking that we were over-exposed in this review. And as a matter of fact they were right. Not only we had a lot of accounts which were under review but we had also some pitches where we were not on the defence but on the offence. The big question mark was, would Publicis be a winner or a loser in this media review? To date, most of the reviews have been done, something like 15 out of 21 or 22, and we are net winners. There are a few losses but we have won much more than we lost. So this is something which is extremely positive. It is a demonstration of the quality of our teams. It is a demonstration of their resilience because, gosh, you have no idea how much they have been asked to work. They worked very hard, they are very proud of the way they have handled it. And it is also the demonstration of what we can do when we put together the technology, the digital and also the creative agency in order to offer to the client a new approach. And this is something which the clients have very much liked. So we are in the process of transforming ourselves and the way we are addressing the client issues.
EBM: Publicis Groupe recently announced an investment in Lucid. How does this fit in with your overall strategy?
Maurice Lévy: This has been brought to us by Sapient. I'm not sure that I would have ever thought about making an investment in a AI company, Artificial Intelligence. And what this brings to us is quite interesting because they have built over time a lot of systems and they have also accumulated a lot of knowledge on people's behaviour. And the way they operate is that they can emulate people's behaviour in front of your offers, your offering in terms of marketing, the product or brand, etc. and this changed the marketing because you have a predictive model which can help you focus much better your message and targeting much better the people you want to reach. So it is a new way of doing marketing, something which, combined with technology, with digital, with a new approach, is really a marketing approach which is making the old system really outdated. It is also something which is bringing in new light on market research. Market research is not perfect. I'm not saying that this system of prediction is perfect. But when you match both and you see which is working better, you see that artificial intelligence is working better.
EBM: Now the press is recently reported that the US Association of National Advertisers had hired to probe the buying practices of media agencies. Do you have any comments to make about that?
Maurice Lévy: Sure. I don't want to comment on the choice or the decision because this is the privilege of ANA and also the discussion between ANA and the 4As. They came to that decision, I'm not saying that I like it, I'm not saying I don't like it. I don't want to make any comment. We feel personally at Publicis Groupe very serene regarding this process. We are extremely respectful of the condition in which we are treating our clients. We are respecting all the terms of our contract. And we are not involved in some areas where there could be some discussion. We don't do any barter, and on programmatic which is a huge debate regarding how to invoice in programmatic, we are invoicing based on our agreement with our clients and the contract we have with them. So we feel very good about this and don't believe we are exposed to anything which would be contrary to good behaviour.
EBM: Now recently, Publicis Groupe held a seminar in San Francisco. Could you tell us a little bit about what its purpose was, and its outcome?
Maurice Lévy: The purpose was about the purpose! And the purpose of our company. We have worked, since the acquisition of Sapient, on a new purpose. Re-purposing Publicis. Publicis Groupe is very different from what it was. And we have worked very hard, which is maybe one of the reasons why our organic growth is not that good also. So we have worked very hard to define a new territory where we can combine the knowledge that we have from technology, the information that we are getting on consulting and how we can put together and leverage all our assets for the benefit of our clients. When you look at the current situation, you see three or four things, which are defining the new economy. The first one is the media landscape, which is upside-down. We know for example that mobile communication will take over newspapers as soon as next year. So the media landscape is in clear revolution. The relationship with the consumer has changed dramatically. Not only he or she is empowered, but he or she has a voice which is stronger than ever. And which is becoming more and more stronger. And on top of this, they are co-creators of our messages. So it's very important to take them, not as people we speak at, but people we dialogue with. The third aspect is that technology and digital are transforming companies and the way they operate. So we have to change and we have to transform ourselves if we want to help transform our clients. We can't tell our clients, 'Ok you have to change the way you operate' and we stay still and we don't change the way we are operating ourselves. Clients need to have agencies which can help them getting to the future first, they need to move much faster, they need to have solutions against the disrupters and they need to have access to the best platforms in terms of technology. All this is something that they can get from Publicis. So that was the purpose. How are we going to transform ourselves? We had a fantastic line-up of speakers and we put all our teams together, working from the basics of our business to the future. And we got hundreds of great ideas. An inspiration moment which has been extremely inspirational for all the people and they came back pumped and really ready to "eat the world", as we say in French. And we are working now on the transformation of the group and how will we bring all these solutions to our clients. And they can tell you that we will be ready to speak again in a few weeks, in a few months, right after we will have finished our work.
EBM: We look forward to it. Thank you very much indeed Maurice Lévy.
Maurice Lévy: Thank you.
