Publicis points at PR for North American slowdown

Publicis Groupe's North American revenue grew 4.5% organically, year-over-year, in the third quarter. However, the holding company attributed a slight dip in revenue from the second quarter to "weak performance" in PR activity in the region.

PARIS: Publicis Groupe's North American revenue grew 4.5% organically, year-over-year, in the third quarter. However, the holding company attributed a slight dip in revenue from the second quarter to “weak performance” in PR activity in the region.

The French holding company, which owns MSLGroup, posted revenue of $1.11 billion in North America. While that total was up on a year-over-year basis, it was down slightly from the $1.15 billion posted in the second quarter of this year.

The holding company did not break out revenue for its PR business. Overall, Publicis reported 3.5% organic revenue growth in the third quarter to $2.3 billion.

Digital operations grew by 12.3% in the period, offset by a drop in analog work by 0.8%. According to Publicis, 37.3% of its revenue came from digital operations as of September 30.

Despite continued weakness in Europe, Publicis said it is experiencing slight improvement in the region. Organic growth in Europe, excluding Turkey and Russia, was 0.4% in the period to $633.6 million.

However, the holding company said it is seeing a slight slowdown in emerging markets. In the BRIC and MISSAT (Mexico, Indonesia, Singapore, South Africa, and Turkey) regions, organic growth was 1.5% to $293.1 million.

Organic revenue growth represents change in revenue without taking into account the impact of acquisitions or disposals.

Omnicom, which Publicis is planning to merge with to create the world's largest marketing and advertising services company, posted its third-quarter results on Tuesday.

In an interview posted on Publicis' investor relations website, Maurice Levy, the holding company's CEO, discussed the merger's progress. He said that the companies have discovered that gaining regulatory approval is a “monumental task.”

Levy revealed that South Korea and South Africa have given the merger the green light, while the company has filed with the Federal Trade Commission in the US and has started a discussion with the European Union.

“Our lawyers, as well as the economists who are helping us to define the market share, etc., are pretty confident, and we should normally get the result pretty soon,” he said.

He also discussed how clients have been responding to the plans and whether any conflicts have arisen.

“For the time being, all my contacts, without any exception, have been enthusiastic, and everyone has congratulated me,” he said. “The teams for this merger and our clients are seeing very well the benefit they can derive from the merger. So, so far, so good.”

Speaking about rival holding companies' responses to the merger plans, he said, “I think that they have been fighting the merger – and they are fighting the merger – because they see themselves all the potential this merger can bring.”

“When you look at all the possibilities, I can understand that they are unhappy. We will have by far the best operation in the world,” he added.

Note: All figures were converted from Euros to American dollars using the XE currency converter.

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