Q1: Digital And Data Are Publicis Groupe’s Pocket Aces
One-third of Publicis Group’s revenue comes from its data and tech business, which includes Epsilon and Publicis Sapient.
In the first quarter, Epsilon grew 10% and Publicis Sapient grew 11%.
Maintaining a differentiated revenue mix is one reason Publicis is growing faster than the global economy, particularly since the pandemic, Chairman and CEO Arthur Sadoun told investors on Thursday.
In Q1, the company’s organic growth hit 7.1% and net revenues reached just over 3 billion euros (approximately $3.4 billion), following two years of double-digit revenue growth.
Data and digital darlings
Publicis saw especially strong performance last quarter in the US and Europe, with 5.8% and 12.3% organic growth, respectively.
Looking forward, Publicis expects full-year organic growth for 2023 to be between 4% and 5%, in “the top half” of its 3% to 5% target for the year, according to Sadoun.
Epsilon and Publicis Sapient contributed greatly to the bottom line in the US.
Both Epsilon and Publicis Sapient are core to the holding company’s vision of itself as a “transformation partner.” Together, these divisions help Publicis capitalize on “the shift in client investment” toward first-party data management, digital media and commerce, which Sadoun said has had “a direct positive impact on our creative and media operation.”
Publicis acquired data management and email marketing company Epsilon in 2019 and digital agency group Sapient in 2014.
Epsilon has more than 300 million global IDs, which it refers to as Core IDs, that correspond to consumer profiles and now help Publicis bolster its identity marketing capabilities.
“We are building real identities to increase our client business outcomes through fast-growing new channels,” Sadoun said, pointing to CTV and retail media.
As third-party cookies continue their Danse Macabre, first-party data management will only become more important, Sadoun said.
An eye on AI
Beyond first-party data, Publicis is also keeping close tabs on AI, but that’s nothing new. Artificial intelligence has been at the heart of Publicis for years, according to Sadoun.
In 2017, the company created its Marcel AI platform through a partnership with Microsoft. AI is woven into the fabric of Publicis Sapient and Epsilon, where AI “allows us to have real-time data that we can enrich and activate in the nanosecond,” Sadoun said.
And in 2022, Publicis cemented a partnership with OpenAI, the owner of ChatGPT.
Still, it will take time before generative AI “can become a reality across the board,” said Sadoun, who noted that “this is not something that will change overnight.”
But as Publicis taps into the power of generative AI to do creative work and achieve personalization and customization at scale, it has an ace in its pocket: Epsilon’s first-party data.
“What sets us apart from the competition is our ability to connect our differences [areas of] expertise by integrating our real-time data and technology into creative production and media,” Sadoun said.