Publicis Groupe reveals 6.3% growth and major investment in AI

Publicis Groupe has revealed it has beaten market expectations and achieved 6.3% organic growth to €13.1 billion (US$14.3 billion) in 2023.

The group has also announced the launch of an AI-powered entity called CoreAI, in which it is investing €300 million ($327 million) over the next three years.

The group has taken the unusual step of pre-releasing its 2023 Q4 and full-year net revenue figures ahead of its official results on 8 February, a move designed to reinforce the announcement of its AI plans.

Speaking to Campaign, Arthur Sadoun, Publicis Groupe's global chief executive and chairman, said: "We've spent the last seven years building a platform. This allows us to have three advantages that none of our competitors have – proprietary data at massive scale, billions of data; a single structure that means we can work seamlessly from one version to another; and 45,000 engineers, consultants and data analysts."

Publicis Groupe's AI strategy, which is explored in detail in a filmed presentation fronted by Sadoun, aims to make the group the "industry's first AI-powered intelligent system". That platform has been key to it outperforming the market, it said, in terms of both "financial and extra-financial KPIs".

The shift to an intelligent system will enable the business to connect "every data point, from across every expertise, business unit and geography, and putting them into the hands of all of its people".

The heart of the system will be what Publicis Groupe is calling CoreAI, an entity developed using Publicis Sapient's AI expertise and partnerships (it designs chips for Nvidia, for instance).

CoreAI brings together all Publicis' proprietary data, including 2.3 billion consumer profiles, trillions of data points around content, media and business performance, nearly a petabyte of assets on its Marcel platform, and 35 years of "business transformation data and coding owned exclusively by Publicis Sapient".

CoreAI will make all its data points available to all 100,000 staff and can be deployed across five main disciplines:

• Insight: providing research, analysis and “business consultant-level intelligence” to help inform marketing strategies and plans.
• Media: optimising planning and buying, achieving greater accuracy and results.
• Creative and production: enabling departments to create personalised content at scale.
• Software: allowing the group to bring to market software and digital products in “days and weeks, not months”.
• Operations: operations and client management systems “boosted with speed, accuracy and efficiency”.

Publicis has earmarked around €300 million ($327 million) in investment over the next three years and plans to spend €100m ($109 million) of that this year.

"Out of our P&L we're going to roughly spend €50 millon ($55 million) on people, which is training, upscaling and hiring, but also €50m on tech, which means partnerships, new IPs and management of the cloud," Sadoun said. "What is important there is this is not going to be dilutive of our margin in 2024, it will actually be slightly accretive in 2025."

The group started building CoreAI in the second half of 2023 and said it plans to "iteratively roll out capabilities in the first half of 2024".

Pre-results performance

Meanwhile, the group's full year experienced a 6.3% hike in organic growth, beating market expectations and Publicis Groupe's own guidance range, which suggested growth of between 5% and 5.5% (last upgraded in October). This was driven by a stronger-than-expected 5.7% organic growth in Q4.

Media, proportionally a third of net revenue, grew by "double digits organically on the year, accelerating in Q4 supported by a faster ramp up in new business"; data and tech (another third of revenue), was "very solid"; while Epsilon reported 10% full-year organic growth.

Publicis Sapient recorded 3% growth for the year and "modest decline" in Q4 due to "ongoing delays in digital business transformation projects, like all comparable IT consulting firms", while creative proved resilient for both periods, achieving single-digit organic growth.

Geographically, Europe reported the strongest level of organic growth over the year (at 10.3% to €3.2 billion and up 4.3% in Q4); with North America, which accounts for 60% of revenue, climbing 4.9% to €8.1 billion for the full year and up 6% in Q4.

Elsewhere, the Middle East and Africa grew organic net revenue by 12.4% to €380 million, Asia Pacific was up 2.9% to €1.2 billion ("a very solid +4.0% in Q4 led by China returning to growth") and Latin America was up 8.9% to €341 million.

The announcement comes in the wake of Publicis Groupe's pioneering use of personalised AI earlier this month, a proof of concept whereby the agency sent 100,000 personalised new-year messages to staff.

Its "Wishes" films were fronted by Sadoun and his AI twin, with different executions featuring AI versions of chief strategy officer Carla Serrano and Maurice Lévy, among others. The group used its Marcel platform to source information about each staff member, with recipients receiving bespoke messages that referenced their hobbies and interests.

Commenting on its latest AI plans, Sadoun said: "Our journey from a holding company to a platform has not been easy but it definitely paid off, as you can see with our 2023 organic growth outperforming the industry for the fourth year in a row. The platform organisation we have built over the last decade, our proprietary data of unmatched breadth and accuracy, and the 45,000 engineers, consultants and data analysts at the heart of our model, uniquely position us to push the boundaries even further by leveraging AI.

"Putting CoreAI at the heart of our organisation will make our people more efficient and more productive. But way more importantly, it will allow everyone to do things tomorrow that no one can do today, guided by the highest ethical standards and at the service of our clients' growth."