February 13, 2018 / 5:16 PM / 4 months ago

Publicis shares jump after Mercedes-Benz global digital agency win

PARIS/FRANKFURT (Reuters) - French advertising group Publicis (PUBP.PA) has won a multi-year contract with Daimler’s (DAIGn.DE) Mercedes-Benz brand to become its global digital agency, hailing the award as one of its most important for years.

FILE PHOTO: A Mercedes Benz logo is pictured at a customer center at the Mercedes Benz factory in Sindelfingen, Germany, January 24, 2018. REUTERS/Ralph Orlowski /File Photo

Publicis shares were up 4 percent at 1623 GMT, making the stock the best performer in France's leading CAC-40 index .FCHI index.

“This was without a doubt the biggest pitch in the industry over the past 18 months, and one of the most significant wins for the group in many years,” said Publicis Chief Executive Arthur Sadoun in an internal memo.

Daimler is one of the top 10 global advertisers, having spent more than $5 billion in 2016 alone, according to U.S. specialized magazine AdAge. Details of the contract and its value were undisclosed.

The world’s third-biggest ad group negotiated with Daimler at the holding company level for about six months and beat its two bigger rivals WPP (WPP.L) and Omnicom (OMC.N) to win the contract, according to the internal memo sent to Publicis employees.

Mercedes-Benz is aiming to give a more consistent look worldwide to its brand and better coordinate its central and local digital content that spans 40 markets, the German company said in a separate statement.

Publicis, whose revenue and margins have been under pressure in a sector marked by the rise of tech giants Facebook (FB.O) and Alphabet’s Google (GOOGL.O), as well as new competition from consulting firms like Accenture (ACN.N), is betting on the expertise of its digital arm Publicis.Sapient to win new business.

Publicis will create a dedicated agency, dubbed Publicis Emil, using resources from different agencies that it wants to see better collaborate. The agency will be based in Berlin and led by Justin Billingsley, chief operating officer of Publicis’s creative division.

Reporting by Mathieu Rosemain and Gwenaelle Barzic; Additional reporting by Edward Taylor in Frankfurt; Editing by David Holmes

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