Dive Brief:
- Bloomberg reports that outgoing Publicis Groupe CEO Maurice Levy believes the agency will rebound in 2017 after a tough couple of years.
- According to Levy, organic growth in Q3 will be hit by contracts lost over the last year, with many major agencies affected by the unprecedented amount of major brand reviews of agency relationships.
- Levy’s successor is expected to be announced sometime between December 2016 and February 2017. He has been CEO of Publicis for more than 30 years.
Dive Insight:
After speculation that it would heavily impact ad agencies, it looks like the UK's Brexit won't affect Publicis' business too much. Despite the Brexit vote, the UK is expected to be Publicis’ second largest market next to Europe. "We don’t know what the impact on the British economy will be," Levy said about the UK leaving the EU. "I don’t think there will be a big impact with a significant decrease in GDP.”
During Q2, the agency's European business helped the agency’s sales grow 0.9%, but even that modest growth helped boost its stock price by as much as 4.3%. Publicis’ Q2 organic growth, a metric that removes currency swings and acquisitions from the equation, was 7.3% in Europe and 5.5% in Asia Pacific, but fell 0.1% in North America.
The news comes at a time when Levy and Publicis face increased scrutiny after a sexism and discrimination scandal at one of the company's agencies. Earlier this year, Levy publically sparred with WPP’s Martin Sorrell over the impact of discrimination in the advertising industry. Levy argued that the lawsuit (and ouster of the chief executive) at the J. Walter Thompson agency was a one-time event, while Sorrell made the point that sexism and racism is pervasive across agencies.