Publicis CEO Maurice Levy claims that the global financial crisis that has caused ad revenues to slump over the last few years is over after his company posted "excellent" results in Q4. Organic revenue, a key metric for the ad industry, grew 12.5% year on year, a rate that the ad agency says it hasn't experienced since the dot-com boom in the 1990s. However, Levy cautioned against ruling out a double-dip recession, saying that uncertainties in the global market could hit the ad sector again.
"The economic climate is more optimistic," he says. "Companies are ready to invest, CEOs are in a better mood, and the American consumer has started spending again. Our excellent results have put an end to the impact of the global financial crisis."
Profits for the year ended December rose 30.5% to EUR526m (USD716m), while revenue jumped 19.8% to EUR5.42bn (USD7.4bn). In Q4 alone revenue was up 23% to EUR1.56bn (USD2.12bn), while organic revenue – which discounts currency fluctuations and the effect of one-off deals – was up 12.5%.
Publicis put its strong performance down to its continuing focus on fast-growing digital ads and emerging markets. Levy claims Publicis adapted to the digital shift earlier than many of its rivals, and digital accounted for 28% of its revenue in 2010, way above the overall market where digital accounts for around 14% of total ad spend. Publicis says it is now aiming for digital to account for 35% of its revenue by 2014, with Levy saying it is planning to launch new initiatives in the space this year. Publicis has also set itself a target of boosting revenues from emerging markets to 30%, up from 23%
"Our strategy is highly targeted and highly focused," says Levy. "We want to strengthen our performance in digital and be a leader in the sector over our competitors."
Publicis saw revenues grow in every region last year, with the fourth quarter particularly strong. Organic growth in Latin America was 13.7%, followed by North America with 9.9%, while Europe lagged behind with growth of 6%. Publicis reported USD5.9bn in net new business in 2010.
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