Publicis, the Paris-based advertising agency, has raised its full-year guidance following a recovery in spending among US tech clients despite continued macroeconomic uncertainties.
Publicis said on Thursday that revenue grew by a stronger than expected 7.7 per cent in the first half of the year, to €7.7bn, while earnings before interest, tax, depreciation and amortisation climbed by 4.9 per cent to €1.4bn.
This growth was based on a rebound in spending among tech companies, it said, with revenue from the sector about 11 per cent higher year on year in both of the first two quarters.
Arthur Sadoun, chief executive of Publicis, told the Financial Times that US tech clients were “starting to invest again” after cutting their marketing budgets last year. He added that the company was upgrading forecasts “against all odds” — pointing to the still challenging background caused by the political uncertainty in the US, France and UK as well as geopolitical tensions.
Sadoun said that Publicis was also benefiting from its investment in technology, adding that more clients were using its services to create and distribute campaigns personalised for individual consumers at scale. This would be further developed with the increasing use of artificial intelligence tools, he added.
Publicis is now targeting annual net revenue organic growth of between 5-6 per cent, compared with previous guidance of between 4-5 per cent. It stuck to existing guidance on financial ratios, targeting an operating margin of 18 per cent and between €1.8bn and €1.9bn in free cash flow, before changes in working capital.
Advertising executives have become more confident this year amid signs that brands are increasing their marketing spend again, and boosted by revenues generated by large events ranging from the European Championship football tournament to the Olympics in Paris. This week, PwC predicted that advertising revenues would top $1tn in 2026, forecasting that revenues in 2028 would double those recorded in 2020.
However, Publicis has also outperformed the rest of the industry, on the back of investments over the past decade that helped launch its data consulting and technology arms. The group will invest a further €100mn this year in developing its AI tools and resources as part of a €300mn AI strategy designed to allow it to better tailor and personalise ads.
Publicis clients could already use its technology to target individual consumers with the “right message at the right time”, he said. The use of AI would have a further benefit, he added, in helping the agency “create, produce and distribute content”.
Sadoun said that the French market now only accounted for 6 per cent of sales but remained important as its headquarters. He said that the market had also grown in the past six months despite the political and economic challenges facing France.