Credit: Alev Takil via Unsplash
Advertising is still a service business at heart, according to Publicis Groupe CEO Arthur Sadoun, pushing back on the idea that technology is replacing people in the AI era.
Sadoun, speaking to analysts after announcing June quarter earnings, said the company's outperformance came from balancing the best talent in the industry with its capabilities in data and technology.
"I know it's a bit provocative in the AI world, but I like to say that we are still a service business," Sadoun said.
"We are a service business with the best capabilities of our industry and beyond in data technology, and of course, AI.
"The truth is, the reason why we have been performing so well today is that we have the right balance between the best people of the industries and unique capabilities, all of this working through the Power of One."
Sadoun said enterprises were finding AI harder to adopt than the hype suggested.
"AI is very difficult to implement at an enterprise level. It is difficult to scale, it is very expensive, it does not deliver business outcomes immediately," he said.
"So yes, you need the best capabilities, but you also need the right people to take the client by the hand and bring him to this."
Publicis reported improved organic growth of 4.8% in the June quarter and lifted its full year guidance to between 4.5% and 5%.
The group's marketing transformation activities, representing 87% of net revenue, grew 6.5% in the quarter as clients bought AI-powered services and products.
Sadoun said the group's strategy had been "the polar opposite" of its competitors, acquiring new capabilities from commerce to influencer marketing while recruiting and retaining talent and training staff to work with AI tools.
The group has almost doubled EBITDA (earnings before interest, taxes, depreciation and amortisation) since launching its AI platform Marcel in 2017, with its margin up 2.7 percentage points in eight years.
CFO Loris Nold said the cost of running AI tools, mainly licences and usage, was being watched daily but was paying for itself.
"What we are observing, if anything, is that the productivity benefits that those tools can generate do offset the cost and it's been clearly evidenced in our margin improvement," Nold said.
"If anything, it's been having a positive impact on our margin, and we anticipate this to continue."
A slide from the presentation to market analysts:
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