Arthur Sadoun on Publicis Groupe becoming advertising’s biggest holding company (for now)

With the assistance, somewhat bewilderingly, of Snoop Dogg, Sadoun had already started celebrating Publicis’s position as advertising’s new top dog in his annual address in December. But the crowning moment of the company’s remarkable recent ascent was overshadowed a mere four days later by Omnicom’s bombshell announcement that it was buying IPG. The combined US-based behemoth should eventually surpass Publicis in revenue terms, but not until the two companies formally merge later this year.

Its looming emergence is perhaps why, speaking to The Drum today, Sadoun is more circumspect about the significance of being number one. How much does it matter? “I mean, not a lot,” the chief exec says. “What matters is not a position. What matters is the journey to get there.”

That journey, eight years in the making since Sadoun stepped up to CEO, has not been without its trials. “Succession is not easy. Filling Maurice Levy’s shoes was not easy. I came at the moment when we were saying that the platform will replace our business. And you remember what we have experienced in terms of stock price. Then we did the [$3.95bn] Epsilon acquisition. That was a very big move, followed by Covid, followed by the war [in Ukraine], followed by my cancer and followed by a [macroeconomic] situation that is not still very strong.

“So it has been a painful journey, but this is why I am very pleased to see the outcome, but more for the journey than for the outcome because we have suffered to get there.”

The acceleration from third-placed holding company three years ago to first today is, according to Sadoun, testament to clients buying into its oft-touted ‘Power of One’ model and the successful integration of major acquisitions, not least data engine Epsilon. “The big reason why we’re going to outperform again is net new business,” says Sadoun. “And I say net because it’s not only about winning; it’s about keeping, thanks to our model.”

Trump’s America and the macroeconomic outlook

Sadoun attributes its dominance of the new business rankings with helping the group grow in all its key territories in 2024 (North America +5.1%, Europe +5.4%, Asia-Pacific +6.3%) despite an often-volatile macroeconomic backdrop. “We are still experiencing some marketing cuts in traditional advertising because clients are cutting here and there,” he says. “And the IT consulting sector has still not recovered from the wait-and-see attitude of clients.” The latter means the company’s digital business transformation arm, Sapient, “has not been the growth engine it has been previously.”

Sadoun says it’s “too early to draw any conclusion” on what impact the new Trump administration, currently engaged in a war of words with its international neighbors on trade, will have on business in its biggest market – the US. “What I can tell you is we are used to navigating uncertain times and this is just another one.”

Nevertheless, he expects 2025 to be another strong year of growth and has priced the wider economic uncertainty into the guidance for investors, which forecasts organic growth in the range of 4% to 5% for the year. Once again, the company has set a budget of up to €900m for acquisitions that can accelerate its push into new markets. Last year, that meant deals such as its move for influencer agency Influential.

Omnicom-IPG takeover presents opportunity

Sadoun acknowledges that Publicis Groupe’s stint at the top of the holding company table – in revenue terms, at least – is only likely to last as long as it takes Omnicom and IPG to complete their amalgamation. But in the meantime, he believes his firm, with its well-established go-to-market proposition, can seize on its rivals’ restructuring.

“It’s going to take five years before we know if Omnicom made the right deal. It has three years of restructuring that is going to lead to thousands of job cuts. And if I understand well, it then has at least two years of succession. If you look at us, between our transformation and our succession, [it was] five to six years before we started to see material results.”

With nine out of 10 global pitches won by either Publicis, WPP, Omnicom or IPG in 2024, Sadoun says the latter two firms “giving up a seat at the new business roundtable” means they are, in fact, reducing the competitive landscape.

“It should definitely present an opportunity for us because what we want to experience in the coming year is Omnicom and IPG integrating more of the same in the name of cost efficiencies, with only one seat at the new business table globally.”

Sadoun says competing with the new Omnicom will be like going “back to the future” of taking on Sir Martin Sorrell’s WPP during his early days in the hot seat of Publicis eight years ago.

“Coming back to a challenger position is something that we cherish because this is the place we like to play. We like to be the disruptor. We like to be the innovator. We like to be the one that can sometimes shake up the market as we did when we decided not to go to Cannes and create the first AI platform at that moment.”

Will Publicis be next in line for a mega-merger?

The redrawing of the agency landscape has inevitably invited speculation about how the other holding companies will respond. Would Sadoun entertain the idea of merging with a rival?

“We thought about this 10 years ago. The question we should ask ourselves is, do we have time to integrate more of the same in the name of cost efficiencies? At the moment, when AI is knocking at everyone’s doors, the answer is no.

“The reason why we’re going faster than the others is that we have better capabilities that allow us to win new business and accelerate our goals. And so no, buying more of the same at scale is not our strategy.”

Consolidation has become the watchword in modern-day holding companies and some internal reorganization has already taken place within Publicis Groupe this year with the merger of its creative networks Leo Burnett and Publicis Worldwide into new brand Leo. Sadoun stresses this is about strengthening the creative brands rather than diminishing them and there are no plans for further internal mergers in the “near future.”

“I’ve been working in this business for 25 years. I’ve been CEO of creative agencies for 18 and I always believe in the power of the brand for something very simple – a brand builds culture and culture attracts talent. And so in my tenure as a CEO, which is now eight years, we haven’t destroyed one [agency] brand and we won’t.

“What we have done with Leo is very simple: we have clarified our brand portfolio because the Publicis brand was at the same time the creative network and the group. Second thing, which is the most important thing for me, is we have brought together two communities of creatives that were matching perfectly in terms of geographies and expertise.”

In Sadoun’s words (unlike for messrs Wren and Krakowsky): “Our transformation is behind us.” To stay at the top, the Publicis boss is betting that the Power of One can overcome the new mighty two.