Publicis Looks to Digital to Weather Financial Storm

Publicis Groupe CEO Maurice Levy today predicted a “difficult finish” to the year for the ad industry, and warned of a “marked slowdown” in 2009 as his firm posted a Q3 decline in revenues of 1.5 percent. Digital revenues, poised to comprise 25 percent of the firm’s total revenues by 2010, are softening the blow.

However, during today’s earnings call with investors, Levy was optimistic that digital revenues will help see the Paris-based firm through challenging economic times. “We had a strategy to reduce the weight of classic advertising and to diversify our operation by increasing the weight of our marketing services, in particular digital,” he said. “Digital will offset a large part of the decline we see in some markets,” he added.

The digital sector accounted for nearly 19 percent of total revenues for the first three quarters of the year, up from 13.6 percent for the same period in 2007. The third quarter growth rate was around 28 percent. According to Levy, the group is “en route” to garner 25 percent of its revenues from digital by 2010.

Q3 results were strongest in North America, and Levy attributed the majority of the region’s 5.3 percent organic growth to digital activities. Within Europe, weaknesses were beginning to show, as the region experienced just 0.9 percent organic growth.

Overall, growth was up 3.9 percent, which Levy noted was higher than expected, adding it was “better than we might have feared, given the turmoil in the world-wide financial system.”

Separately, Publicis USA today said it has appointed John Rabasa to the executive vice president, managing director post at Publicis Modem & Dialog in San Francisco. Recently, Rabasa served at AOL, and has also worked at R/GA. Rabasa will report to Publicis Worldwide Chairman and CEO Susan Gianinno. Publicis Modem & Dialog is a global digital agency network.