Oct. 28 (Bloomberg) -- Publicis SA, the owner of the Saatchi & Saatchi advertising agency, said third-quarter revenue was little changed as turmoil in financial markets worsened, pushing developed countries into a ``zone of turbulence.''

Revenue fell to 1.11 billion euros ($1.4 billion) from 1.12 billion euros a year earlier, the Paris-based company said in an e-mailed statement today. Sales excluding currency swings and acquisitions increased 3.9 percent.

Publicis, the world's fourth-largest ad company, forecast ``a difficult end of 2008'' and a ``notable'' slowdown in business next year, Chief Executive Officer Maurice Levy said late yesterday. The company is relying on expansion into emerging markets and digital advertising to help counter weaker growth in developed markets and traditional sectors.

Next year ``will be a real challenge in mature markets,'' Levy said during a call with analysts today. The company ``will protect'' its profit margin goal of 16.5 percent for this year, he said, adding next year's market situation is not clear.

``Publicis's inability to give guidance for 2009 gives a clear message to investors: 2009 revenue growth is very unlikely to surprise on the upside,'' said Gareth Thomas, an analyst at Collins Stewart Plc in London.

As ad growth slows and credit markets seize up, Levy said in the call he was unable to foresee the intensity or duration of the turbulence. ``We're traversing a large hurricane.''

Lower Growth Forecast

Worldwide advertising will increase less than forecast this year, marked by cuts in luxury goods, travel and entertainment, researcher ZenithOptimedia Group Ltd., a Publicis unit, said this month, cutting its forecast for 2009 to 4 percent from 6 percent.

Publicis gained 61 cents, or 3.9 percent, to 16.41 euros a share in Paris trading. The stock has lost 39 percent this year.

Publicis has seen a slowdown in the automotive industry, while the financial sector ``is contrasting,'' as some clients cut spending while others raised it, Levy said yesterday.

Digital advertising contributed 18.9 percent of revenue by the end of September, compared with 13.6 percent a year earlier. The company has said it's aiming for 25 percent of sales from digital ads by 2010.

Publicis, which has announced eight acquisitions this year according to Bloomberg data, will be less active, Levy said.

``We've already slowing down on the acquisitions front,'' he said in an interview with Bloomberg Television. ``We manage our cashflow with a lot of caution, and our intention is to continue to consolidate our balance sheet. We just reduced our debt level and we expect to come out of the crisis with a much better balance sheet than we went into it with.''

Less Debt

Net debt at Sept. 30 totaled 1.25 billion euros, down 255 million euros from a year earlier.

Worldwide Internet ad investment growth will rise 24 percent this year to $60 billion, equivalent to about 12 percent of all measured media advertising, according to Adam Smith, futures director at GroupM. GroupM is the parent company of media agencies for WPP Group Plc, Publicis's U.K.-based rival.

The French company agreed in August to buy the Performics search marketing business from Google Inc. and last year it paid $1.3 billion for Boston-based online ad agency Digitas.

Online advertising spending in Europe this year is estimated to total 13 billion euros, compared with 11.2 billion euros last year, according to Alison Fennah, director of the European Interactive Advertising Association.

To contact the reporter on this story: Kristen Schweizerkschweizer1@bloomberg.net

Last Updated: October 28, 2008 13:03 EDT