New Publicis Chief Arthur Sadoun Takes On a Turbulent Era
18 June 2017 - 7:59PM
Dow Jones News
By Suzanne Vranica
Madison Avenue has a new power player: Arthur Sadoun.
Mr. Sadoun was installed earlier this month as the new chief
executive of advertising giant Publicis Groupe SA. The 46-year-old
is only the third chief executive to lead the storied ad
conglomerate in its 91-year history.
Known for his client-handling skills, Mr. Sadoun has big shoes
to fill. He takes over from Maurice Lévy, the widely respected ad
chief who led the Paris-based firm for almost 30 years and was
named chairman of the supervisory board. Mr. Lévy transformed
Publicis into the third-largest ad holding company in the world,
with EUR9.73 billion ($11 billion) in revenue last year and 80,000
employees crafting marketing for brands such as Nestlé SA, Samsung
Electronics Co. and Citigroup Inc.
Mr. Sadoun is charged with navigating the company through the
most turbulent time in marketing. Technology now enables consumers
to more easily avoid ads, the dominance of Facebook Inc. and
Alphabet Inc.'s Google continues to grow, and the trust between
agencies and marketers in the $529 billion global ad business has
been damaged by a report that was released last year that said the
U.S. ad industry is full of nontransparent business practices.
Mr. Sadoun will need to help the company get back on track after
losing significant assignments from a rash of companies such as
Procter & Gamble Co. Its bold acquisition of Sapient has also
failed to live up to expectations.
The Wall Street Journal caught up with the newly installed ad
czar to discuss the brewing tensions between advertisers and tech
giants, the challenges ad companies face, and how rising populism
is affecting marketing.
Edited excerpts:
WSJ: What is the biggest threat to ad companies?
Mr. Sadoun: If the industry does not bring back growth to our
clients' business, we will be in danger. We have to overcome the
fragmentation that now makes marketing splintered. We must be
delivering expertise in technology and data and think very broadly
about creativity.
WSJ: Have Google and Facebook done enough to calm the concerns
marketers have about brand safety and measurement?
Mr. Sadoun: We've been pleased to see Google and Facebook's
recent efforts in this area. But there is a lot more they will need
to do. Clients are worried by the lack of transparency on how and
where their marketing messages are distributed and/or seen, how the
algorithms work and the 'just trust us' approach. Today, leveraging
data is key to marketing, but the limited amount of data clients
get back about their [marketing] programs and the lack of a true
ability to work across platforms, like they can do on the open
internet, is a problem. It's the clients' money and data after all.
We need a lot more access.
WSJ: Publicis recently wrote down the value of Sapient, a
digital-technology company. What's been the biggest challenge?
Mr. Sadoun: The premium we paid for Sapient was not completely
justified due to slower growth than we had anticipated. So we
reflected this slower growth by taking this noncash charge. The
struggles for growth, partly, came from us underestimating how
difficult it is to get technologists and marketing working
together. They are different cultures. We have been winning
business and seeing momentum globally.
WSJ: There is a real lack of trust between agencies and
marketers following the Association of National Advertisers' probe
that discovered a lack of transparency in the way agencies conduct
business. How can ad companies repair the relationships?
Mr. Sadoun: At Publicis, we believe any areas of conflict of
interest must be eliminated right away and clients should never
feel that there is any part of the process that they do not have
transparency into. While we have passed all the audits to date, we
remain committed to reaffirming a trusted and principled
relationship.
WSJ: There has been a huge rise in populism around the world.
What does that mean for marketers?
Mr. Sadoun: We have to acknowledge that there is almost
everywhere in the world a middle class that is really in pain. This
is something that we need to take into account at the political
level, but also in the way we communicate. It has never been so
important to make sure that whatever you do, you make people
understand what you bring into their day-to-day life. This is what
we are trying to do with our clients. A brand that is strong is a
brand that is playing a concrete role in people's life.
WSJ: Where will ad companies be in five years?
Mr. Sadoun: The one prediction I will make is that there is
likely to be more changes in our industry in the next five years
than in the past 20.
Write to Suzanne Vranica at suzanne.vranica@wsj.com
(END) Dow Jones Newswires
June 18, 2017 05:44 ET (09:44 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Publicis Groupe (QX) (USOTC:PUBGY)
Historical Stock Chart
From May 2024 to Jun 2024
Publicis Groupe (QX) (USOTC:PUBGY)
Historical Stock Chart
From Jun 2023 to Jun 2024