Given Publicis Groupe’s hot streak in recent years, it’s not surprising that the French agency group produced strong results in the last quarter of the year. Organic growth reached 6.3 percent year-on-year, bringing full-year organic growth up to 5.8 percent — significantly above the 4-5 percent range which Publicis forecasted at the start of last year.
Publicis CEO Arthur Sadoun said on an earnings call following the results that the strong performance means his company ended 2025 as the largest advertising company in the world. This status however will be short lived, with Omnicom set to take the top spot once its merger with Interpublic Group completes.
Sadoun was characteristically candid on the earnings call about how he thinks that merger will change the industry, as well as his thoughts on Publicis’ winning formula, and the impacts AI is having on agencies.
A category of one
Sadoun has spoken frequently in the past about how he believes Publicis is pulling away from its competitors, often citing its unique business balance (one third media, one third creative, and one third tech and data), its investments in data, and its capabilities in growth areas like CTV and retail media.
Now, he’s started thinking about the business split a bit differently. Publicis’ media business is now so entwined with its data unit Epsilon that the group reports revenues for the two together, as ‘connected media’, which make up 60 percent of revenues. ‘Intelligent creative’ — revenues from creative agencies which also benefit from Publicis’ data capabilities — account for 25 percent of revenues. Publicis Sapient, which provides business transformation services for clients, makes up the final fifteen percent.
While the business split might be presented differently, the core proposition remains the same. Sadoun puts Publicis’ success down to four key factors: its strength in proprietary and first-party data, its ability to connect that data across all media at the individual level, its talent bench of engineers and consultants which help drive business transformation for clients, and its flexible single platform organisation.
Sadoun said he believes Publicis is now in a “category of one”, arguing that none of the other holding groups offer the same services to clients that it does. Interestingly, Sadoun said that agentic AI capabilities within its CoreAI platform have helped it reach this status.
“What truly makes Publicis a category of one is that only we, thanks to CoreAI agentic applications, connect all four of those competitive advantages at scale to deliver identity-led marketing business transformation,” he said. “This puts us in a unique position to really answer our clients’ needs.”
Back in the challenger seat
While Sadoun says Publicis is operating in a league of its own, he acknowledged that the Omnicom/IPG merger will knock his business back into second place when judged by billings. And while he couldn’t resist taking a few swipes at his rivals (stating for example that Publicis has reached the top spot through building competitive advantage, rather than “merging more of the same legacy businesses”), the Publicis CEO maintained that the merger is a positive for his company. Publicis, as he put it, likes to be in the challenger seat.
While the new Omnicom will undoubtedly have scale, Sadoun said he expects Publicis will outperform it, as his company has “a totally different revenue mix and assets” compared with its American rival. And indeed, he sees a few specific opportunities for Publicis to capitalise on the merger.
Comvergence data, which Sadoun cited, shows that nine out of ten global pitches are won by one of the four largest agency groups: Publicis, Omnicom, IPG, and WPP. Once Omnicom and IPG have merged, they will only take one seat at the table, which Sadoun said will create “a landslide of opportunities for [Publicis] to capture”.
He also said that uncertainty for staff at Omnicom and IPG will give Publicis an opportunity to capture new talent. “Everyone will see a choice between two radically different companies,” said Sadoun. “On one hand, a company with three years of hard restructuring leading to thousands of job cuts, particularly in the US. On the other, a business on a journey of growth and innovation that has repeatedly shown it will put its people first.”
One last merger-related tidbit which emerged from the call: Sadoun suggested that IPG had approached Publicis about a potential merger, prior to sealing its deal with Omnicom. “It’s no secret that Philippe [Krakowsky, IPG’s CEO] has been looking for a future for IPG for a couple of years now,” said Sadoun. “He has knocked on many doors, including ours, by the way. And eventually he did a very good deal.”
New business BS and “silly behaviour”
Another potential benefit from the merger according to Sadoun, and the subsequent reduction in competition between the top agency groups, is that there might be less “silly behaviour” in pitches when it comes to pricing.
When asked about the current pitching market, Sadoun said it’s been largely business as usual in terms of competitiveness. But he said in 2024 he’s seen some “silly behaviour” on a couple of pitches — and while he didn’t specify whether this was behaviour from potential clients, other agencies, or both, he suggested that the outcome has been rival agencies winning accounts for very low prices.
“You see some of our peers winning a lot of new business, and it’s not really having an impact on organic growth, so you can ask the question why,” said Sadoun.
That wasn’t the only time he aired frustrations around how new business wins are reported. Elsewhere on the call, he claimed there is “a lot of BS in the press when it comes to new business,” arguing that not all new business wins are equal, and that client retentions are just as important as big new account wins.
The AI revolution is pending
As mentioned earlier, Publicis sees its heavy investment in AI capabilities and talent as a major part of its strategy. But Sadoun did at times strike a more restrained tone when talking about its impact.
He mentioned the release of Chinese AI company DeepSeek’s app last week, which led to falls in US tech stocks due to DeepSeek’s strong performance and low cost. Sadoun said DeepSeek’s release shows that AI is a commodity and an “equaliser”. He argued that being able to combine first-party data with AI tools will be the real advantage for agencies, rather than having particularly sophisticated AI models.
Along these same lines, Sadoun emphasised that while some other agencies are starting to position themselves as AI businesses, Publicis isn’t going down that path.
“We are not there,” he said. ” We are an identity led marketing and business transformation company. What matters for us is the transformation of our clients, and so coming back to AI, it is a tool that can help us go further.”
And while Sadoun highlighted a few specific use cases where AI is allowing Publicis to work with clients in ways it’s been unable to previously, he added that it’s still early days. Currently, AI’s impact on Publicis’ margins is quite small, which Sadoun attributed to the fact that the company is still busy investing and implementing use cases. “It will take time before you see something that is really revolutionary,” he said.