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India emerges as important growth market for Publicis Groupe in 2012

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MUMBAI: India is emerging as an important growth market for Publicis Groupe. In a slowdown ad economy, the France-based global media communications network is banking on the emerging markets to accelerate its revenues.

And India is ranking fifth among the BRIC+MISSAT (Brazil, Russia, India and China and Mexico, Indonesia, Singapore, South Africa and Turkey) countries, which combined posted a robust growth of 26.3 per cent in the fiscal ended 31 December 2012.

Publicis Groupe‘s India operations grew at eight per cent for the fiscal even as revenues from the BRIC+MISSAT region climbed to 892 million euro in the fiscal from 706 million euro a year ago. China topped the list with a growth of 14.7 per cent.

Sr. No

Country

% growth (2012/2011)
1 North America 15.6
2 China 14.7
3 Mexico 11.6
4 South Africa 10.8
5 Brazil

10.3

6

India

8
7 Switzerland

5.4

*North America is a seperate region; Switzerland is part of Europe

The agency‘s aggressive intent played out in 2012 as it made four acquisitions in India, three of which were digital entities – Indigo Consulting, Resultrix and iStrat. The other one marketing consultancy firm Marketgate.



In 2012, Publicis‘ major account wins in India included Nestle, Airtel, Axis Bank, Bharti Walmart, Dabur and HP.

Publicis does not disclose its revenue figures in India. According to RECMA report, the Groupe’s billings in 2011, through its media agencies in the country ZenithOptimedia and Starcom MediaVest, grew by 32.56 per cent to touch $570 million.

On a global level, Publicis‘ growth from Europe has slowed to 5.6 per cent. North America has seen stronger growth at 15.6 per cent.

The company saw its total revenue rise by 13.7 per cent to 6.61 billion euro from 5.82 billion euro in 2011. Net income grew 22.8 per cent to 737 million euro.



Digital activities accounted for 32.9 per cent of total revenue, up from 30.6 per cent during the previous year. The high-growth economies generated 25.5 per cent of total revenue, up from 24.3 per cent in 2011.

Strictly digital activities accounted for the largest portion of consolidated revenue (33 per cent, up from 31 per cent in 2011), followed by “analog” creative advertising (30 per cent, down from 31 per cent the previous year), the SAMS (unchanged at 19 per cent) and media 18 per cent (after 19 per cent in 2011).



For the fourth quarter ended 31 December 2012, the Groupe’s revenue was 1.9 billion euro, up 11.9 per cent from Q4 FY 12’s 1.7 billion euro. Europe grew at 9.4 per cent, North America at 9.2 per cent, BRIC+MISSAT at 29.3 per cent and the Rest of the World at 9.6 per cent.



Says Publicis Groupe chairman and CEO Maurice Lévy, “2012 was to be the year of recovery, but turned out to be difficult, uncertain and disappointing as regards growth and employment, especially in Europe. Yet it was a record year for Publicis Groupe in terms of revenue, margin, income and the strength of its balance sheet. The global advertising market had been expected to grow by 4.7 per cent, but actual growth will fell below the 3 per cent mark with advertising income from Euro 2012 and the London Olympics well below expectations. We owe our good performance to the trust our clients have in us, but also to the talent, passion and outstanding professionalism of our people whose agility and speed of response enabled us to bring our clients original, innovative and creative solutions.”



Levy believes the touch conditions would continue to prevail in 2013, with the American market, the high-growth economies and the digital services sector being the possible silver linings.

“2013 is shaping up to be a difficult year, a year of uncertainty, with a number of bridges to be crossed. Even though the euro crisis now appears to be behind us, the situation in Europe is still highly contrasted and advertising investment forecasts are down on 2012. The latest market growth forecasts from ZenithOptimedia are quite high (4.1 per cent in December after 4.6 per cent in October) but also fragile. Growth is chiefly expected from the USA, the high-growth economies and the digital services sector... Publicis Groupe therefore intends to continue to pursue its strategy of expanding its digital business and its presence in high-growth economies, through priority investments targeting segments that will ensure its future growth while bolstering its profitability over time,” says Levy.

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