(Bloomberg) -- Publicis Group SA raised its guidance for net revenue for the year after the advertising agency posted stronger growth in the first half, particularly in China and the US.
Organic revenue will grow by 5% to 6% this year, the Paris-based company said in a statement on Thursday. That’s up from 4% to 5% previously.
“Given how powerful our model is, we’re benefiting from arbitrage of our clients which allow us to gain market share,” Chief Executive Officer Arthur Sadoun said in a briefing with reporters. “We’re gaining market share where markets are falling.”
To get to the upper end of the range, the “macroeconomic context” for the advertising industry will need to improve in the second half of the year, it said. The advertising industry has been grappling with caution from clients who are diverting funds to upgrade technology or guard against an uncertain economy, according to analysis from Bloomberg Intelligence. The upcoming Olympics and US presidential campaigns could help growth in the second half of the year.
What Bloomberg Intelligence Says:
Publicis’ better-than-expected 2Q organic net sales growth (5.6%) and upgraded full-year guidance (now 5-6% vs. 4-5%, consensus 4.7%) underscores the strength of the ad-agency’s business model that’s helping it take share from rivals. The bold M&A pivot into digital-business transformation and AI-spending program are helping decouple top-line performance from the economic cycle.
— Matthew Bloxham, Bloomberg Intelligence Senior Industry Analyst
Publicis is leaning into data analysis and artificial intelligence to overcome the slump. It said earlier this year that the advertising agency was looking for deals to strengthen those capabilities, and would invest €300 million ($328 million) in the next three years on AI to help personalize campaigns and target audiences.
Shares jumped 5.5% to €102.50 at 9:40 a.m. in Paris trading after earlier rising as much as 8.5%, the biggest intraday gain since November 2020. The stock has gained about 23% this year.
(Updates share prices in final paragraph)
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