Publicis Groupe SA’s Chief Executive Officer Maurice Levy said first-half billings are “seriously up” from a year ago as companies such as L’Oreal SA, Nestle SA and Procter & Gamble Co. boost spending, fuelling an advertising market rebound.
“Last year everyone was depressed and not thinking about how to grow, but how to cut expenses,” Levy said in an interview in London today. “Clients’ spending this year is more about catching up with what they lost last year.”
Ad companies are benefitting as the industry starts to rebound and marketers boost spending after cutbacks during the recession. Publicis, which owns the Saatchi & Saatchi and Leo Burnett ad agencies, beat first-quarter growth of 3.1 percent in the past two months, Levy said today, adding that the second quarter will “certainly be better than the first quarter.”
He also forecast the overall ad market will rebound next year to 2008 levels or better.
Publicis shares dropped 0.1 percent to 32.88 euros in Paris trading today.
Levy, 68, said he had wanted to retire as CEO when his contract expires at the end of next year, though the board earlier this month asked him to stay on while economic uncertainties continued.
He’ll continue to serve “for as long as necessary,” though no time limit was determined, he said, adding that three to four people are in line to succeed him.
Publicis, which reports first-half earnings at the end of July, said the first five months of the year were better than expected, especially in the U.S., which “was quite a surprise,” Levy said.
“It looks like consumers have regained confidence and advertisers are fighting for market share,” he said.
WPP Plc, Publicis’s U.K. rival, said yesterday revenue in the first five months rose 1.8 percent, led by a recovery in the U.S. and U.K. Revenue growth in the U.S. was more than 7 percent in April and May while the increase in the U.K. was more than 4 percent, WPP said.
Levy said today television advertising prices increased, after dropping sharply last year. Publicis still has a partial hiring freeze at most of its agencies, though not for digital operations and the Leo Burnett agency, Levy said.
Asked whether the economic slowdown last year made it more difficult to get access to financing, Levy said that the company “doesn’t have a cash issue” as it has about 3 billion euros available in cash.
Levy said he’s continuing to seek acquisitions of small and medium-sized businesses that fit with Publicis’s presence in digital and emerging markets. He added that the company has “many projects and many discussions, but the problem is to find the right targets.”