INTERVIEW-UPDATE 1-Publicis PR unit to double revenue in 3 yrs
* Publicis PR unit to double its revenue in 3 yrs
* Wants to complete 2-3 buys this year, focus on Asia
* Group aims 25 percent of revenue from BRIC nations by 2010
By Melanie Lee
SHANGHAI, Aug 26 (Reuter) - Publicis Group's (PUBP.PA) public relations and events arm is looking to double its revenue in three years by acquisitions and organic growth driven by China and other emerging markets, the unit's chief executive said.
The PR and events unit of Publicis, the world's third-largest advertising group by revenue, is aiming to complete two or three acquisitions by year's end, with a focus on Asia.
One of the acquisitions will be in China and will double the unit's headcount in the country to about 300, Olivier Fleurot told Reuters in an interview on Wednesday.
The buys are to be in the digital and new media space and are already affiliates of the unit.
Fleurot said China was becoming a focal point for Publicis's PR unit given the country's economic resilience during the global downturn and as the Chinese consumer is coaxed to spend more. "The Chinese consumer can become the new engine of growth for the world and replace the U.S. consumer," said Fleurot.
"So we believe there is a huge potential here and we don't have the critical mass we want to serve local as well as international clients," he said.
Under its PR unit, Publicis runs public relation firms MS&L and Publicis Consultants, who in turn manage clients such as Nestle (NESN.VX), General Motors [GM.UL], Procter & Gamble (PG.N) and Best Buy (BBY.N). Currently, Fleurot said his unit contributed between 10 to 15 percent to the parent's company's total revenue.
The estimated yearly revenue figure for the Publicis Group PR and events arm is about $400 million to $500 million, which could go up to between $800 million and $1 billion in 3 years as the unit expands further into developing markets.
Fleurot said the group expects 25 percent of its revenue to come from Brazil, Russia, India and China by 2010.
The unit is also looking to offer higher level consulting services in Asia to boost revenues and help clients navigate the new media arena.
"New media is evolving very fast, some companies have big issues (with it)," Fleurot said. "There is a very fertile ground for our job provided we take it to the level of being real advisers," he added.
REJUVENATING IN 2010
The global economic crisis has hit advertising firms hard as their clients tightened their belts and cut spending but Fleurot said the industry's recovery should start in the first quarter or second quarter of next year.
Publicis earlier this month struck a $530 million deal with Microsoft (MSFT.O) to buy the Razorfish ad agency and boost its position in digital communications. [nL9724772]
Publicis is already the market leader in digital advertising since its purchase of Digitas.
During its second-quarter results in July, the French advertising company reassured investors the worst of the global downturn that hit its first-half earnings was behind and said that it aimed to return to sales growth next year.
Chief Executive Maurice Levy said the first positive figures will be published during the summer of 2010 and Publicis should post "slight growth" next year. [nLL425958]
Publicis competes with domestic rival Havas (EURC.PA), U.S. advertiser Omnicom Group Inc (OMC.N) and Britain's WPP (WPP.L).
(Reporting by Melanie Lee, Editing by Jacqueline Wong)
((melanie.lee@thomsonreuters.com; +86 21 6104 1778; Reuters Messaging: melanie.lee.reuters.com@reuters.net)) Keywords: PUBLICIS/
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