Publicis prepares for foggy year after organic growth beat

(Reuters) – Publicis, the world’s third-biggest advertising group, beat market expectations of organic growth in the first quarter but stuck to its full-year outlook on Thursday, hindered by economic uncertainties.

Home to ad agencies Leo Burnett and Saatchi & Saatchi, the French company posted net revenue of 2.80 billion euros ($3.05 billion), up 10.5% organically, against a 6.3% increase forecast by analysts in a consensus compiled by Publicis.

“We started the year very strongly, both financially and commercially,” Chief Executive Officer Arthur Sadoun said in a statement as he shared his confidence in coming in at the upper end of an unchanged 4%-5% full-year organic growth target.

“These good results should not conceal the macroeconomic uncertainties the world is facing today,” he however told journalists in a call. “We have to remain agile.”

While the beat should have led Publicis to upgrade its objectives, the group expressed reservations on the consequences the global health situation, the conflict in Ukraine and the rise in raw materials and energy prices could have.

Publicis also needs to navigate a shift in sector trends as Alphabet’s Google is looking to phase out use of what it described as privacy-invasive cookies.

Because the coming disappearance of third-party cookies raises the complexity of digital media, our role with customers becomes all the more essential, the group wrote in an email to Reuters, emphasising the competitive advantage of its data company Epsilon.

The latter’s CORE ID solution does not depend on third-party cookies but relies on advertisers’ “first-party” data, allowing their activation on publishers’ sites directly.

In a cookie-less future, we believe Epsilon will actually grow its market share, Publicis noted.

($1 = 0.9188 euros)

(Reporting by Juliette Portala and Augustin Turpin; Editing by Bernard Orr)