The Strategist

Advertising holding forecasts unprecedented drop in advertising costs worldwide

04/15/2020 - 03:46

French advertising holding Publicis Groupe, the third largest in the world, warned that advertising costs will fall lower than at the peak of the 2009 crisis, when they fell by 10%. CEO Arthur Sadoun told The Wall Street Journal that the new crisis will be "unprecedented in scale, complexity and duration."

According to him, only in March the pace of cutting spending on advertising "was more significant than ever in the past."

In the first quarter of 2020, Publicis revenue grew by 17% in annual terms, to €2.48 billion. The improvement was driven by additional revenue from Epsilon, a marketing company acquired last year. In organic terms, excluding exchange rate differences and the purchase and sale of assets, revenue decreased by 2.9%. At the same time, sales fell 9.2% in Europe and 1.9% in the Asia-Pacific region, while in North America they grew by 0.5%, according to a press release from Publicis.

The company announced that it would cut costs by €500 million by cutting salaries to management by 20-30% and halving the amount of dividends.

Shares of Publicis cheaper 1.1% at auction in Paris on Tuesday. Since the beginning of the year, the company's capitalization has decreased by 26.4% to €7.1 billion.

Publicis is the third largest advertising holding company in the world after WPP PLC and Omnicom Group Inc.


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