👀 Ones to watch: Undervalued stocks to buy before they report Q3 earningsSee Undervalued Stocks

U.S. digital ads spur Publicis' return to growth

Published 04/15/2021, 01:33 AM
Updated 04/15/2021, 01:35 AM
© Reuters. FILE PHOTO: FILE PHOTO: Logo of Publicis is seen at VivaTech fair in Paris
OREP
-
GOOGL
-
META
-
005930
-
GOOG
-

By Milla Nissi

(Reuters) - Publicis, the world's third-largest advertising group, on Thursday beat market expectations as it returned to organic growth for the first time since before the pandemic, fuelled by high demand for digital advertising in the United States.

In the face of growing domination by Facebook (NASDAQ:FB) and Alphabet (NASDAQ:GOOGL)'s Google, the Paris-based group is striving to move from traditional print and TV ads to targeted digital campaigns steered by data.

In a call with reporters, Chief Executive Officer Arthur Sadoun said the return to growth demonstrated that "the acceleration towards digital channels, data, and commerce in general is a tidal wave accelerated by the crisis."

Underlying sales in the United States, Publicis' biggest market where it generates more than half of its revenues, grew by 5.1% in the quarter, while Asia posted a growth of 5.7%.

The strong U.S. performance was driven by Publicis' digital business Sapient, which increased its revenues by 11%, while the data company Epsilon, acquired in 2019, bore fruit for a second consecutive quarter with nearly 5% growth.

On group level, underlying sales grew by 2.8% to 2.4 billion euros ($2.87 billion) in the first quarter, compared with the same period last year when the emerging COVID-19 crisis pummelled the sector and clients sliced advertising budgets to save cash.

Analysts had expected an organic decline of 2.0% for the quarter, according to a company-provided poll.

The key metric benefited from new business wins such as L'Oréal (PA:OREP)'s media business in China, Toyota in Australia, and Samsung (KS:005930) media in the United States, the company said.

Publicis, home to ad agencies such as Leo Burnett and Saatchi & Saatchi, did not provide an earnings outlook for the full year but said it expected to report organic growth between 8% and 10% in the second quarter.

© Reuters. FILE PHOTO: FILE PHOTO: Logo of Publicis is seen at VivaTech fair in Paris

($1 = 0.8351 euros)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.