profiles Maurice Lévy chief executive, Publicis Groupe

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‘PUBLICIS GROUPE‘

In spite of the economic downturn and the suspect, cost-cutting tactics increasingly employed by agencies to guarantee pitch wins, French-based Publicis Groupe is calling 2009 a success, with $6bn in new business to its name, and a move up the agency holding group rankings to boot

“Viva la différence!” has certainly made a difference at Publicis Groupe. Speaking in his first interview as the head of the world’s third largest agency holding group, the chief executive Maurice Lévy is justifiably proud of the fact that the French headquartered advertising group has managed to gain marketshare in a downturn. Sticking the boot in for rival

Interpublic, now demoted to fourth place following the release of both companies’ 2009 financial figures, is not his deliberate aim, but he thinks that being a top three player opens the door more readily to more clients. And being different is the key to success, he says. But he insists that it’s not a French

versus Anglo-American dynamic at play. It’s because the group has a ‘challenger spirit’. “We were born challengers. The industry was negated by the French people. We were challengers against the competition. In the past, we had no number one position. Now we can say we are a leader,” the charismatic Frenchman says. “We like to be different. In the way we work, our strategy, our origin, the way we treat our people,” he continues. Managing to turn negative financial

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results (Publicis still posted a 6.5% decline for 2009) into a positive takes confidence. But even if Publicis is heading in the right direction,

16 M&M PREVIEW 2010

marketing services is at a low ebb, massively devalued over the years. Take the market capitalisation

for Publicis Groupe, combined with that of its three largest competitors – Interpublic, WPP and Omnicom – and it is just a fraction of the value given individually to the likes of Google, Apple or Microsoft. Ten years on from the height of the dotcom boom, it is technology, not marketing services, that is the stuff of investors’ dreams, even if the latter brings in more revenues. Lévy puts the blame on the big holding companies of the 1980s – Publicis Groupe was not one of them. “They progressively accepted to be considered as service providers. That’s a big part of the business, but the largest part is value creation. We help build brands, build marketshare and sell products. “Creating value for our clients should not be any more measured or paid by hourly fees.” Whether it is a flat fee, a percentage from sales or license fees for ideas, he agrees a new system for compensation is a necessity. However, Publicis Groupe came out of last year with a net gain of $6bn

“Turning

negative financial results – Publicis posted a 6.5% decline for 2009 – into a positive takes confidence”

in new business. It can’t have risen completely above the trouser-dropping scenarios that dominated much of the pitching that took place last year. Here, he talks of “unreasonable competition” because of companies “badly in need of revenues”, which provides an easy environment for clients to win the rebates they might want. But it is difficult to change that when the industry is nourished by the competitive element. Ego also has a lot to do with it. Lévy smiles: “Winning is also beating someone.” The one clear thing is that change isn’t coming quickly enough. “As long as there are weak links in our price we dump the value of what we sell, and it will be very hard for healthy companies to sell the right value,” Lévy concedes. While there are

examples of clients refusing the cheapest

offers on the table and picking an agency based on the services it can deliver, Lévy’s

priority is to keep raising the group’s game to dig marketing services out of the hole it finds itself in. The need to innovate is a given, although hard to achieve. ‘Taking a bet’ is a phrase Lévy uses often. He claims to have been in digital before his competitors and that the first conversations about buying both Digitas and Razorfish – number one and two in the interactive world – took place in 2003. “But you can’t chase two hares at

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