Arthur Sadoun: Agencies should be ‘optimistic’ not ‘scared’ about future

Arthur Sadoun has told Campaign that agencies should be “optimistic”, not “scared”, about their future and they have a “fantastic opportunity” in the age of artificial intelligence, despite the toughest trading conditions since the pandemic.

The chief executive of Publicis Groupe admitted it was “cold outside” for some of his agency rivals, as they battle declining revenues and cut jobs, but he said he expected “WPP will come back” under a new CEO, following Mark Read’s decision to step down last week.

However, Sadoun hit out at WPP Media for what he called “throwing mud” after it circulated its own “competitive intelligence” report that alleged Publicis’ Epsilon programmatic platform contains “significant volumes of made-for-advertising content, clickbait and low attention inventory”.

Sadoun said he was “sad” that WPP Media had attacked Publicis – although he could not believe that Read himself had pushed for the report – and claimed WPP had bought only $200 worth of media for its test of Epsilon. 

“We have nothing to win by throwing mud at each other in this way,” the CEO of Publicis, the world’s biggest agency group, said, referring to WPP’s criticism of his company. “It’s a tough moment out there for our clients, and they don’t want to see us doing this.” Campaign has contacted WPP for comment.

Sadoun was speaking in an exclusive interview at Campaign House on the opening day of Cannes Lions, where he urged the industry to use the week-long festival “to show how useful and brilliant our industry is”.

Before the festival, Sadoun had called for a “different approach” at this year’s Lions because of macro-economic uncertainty for clients and job cuts and, on arrival in Cannes, he said it was evident that some companies were spending too much on activations and entertaining.

“This is silly money,” he said. “We are spending 51 weeks trying to save money for our clients, and, in one week, you see so much money everywhere. They [clients] are thinking: ‘Do we really need that? Is that really celebrating creativity? Is that truly bringing innovation?’”

But Sadoun said the festival, which Britain’s Informa acquired last year, remained important and there was an opportuntiy “to really think, as an industry, how can we truly be useful in this particular moment”.

Publicis is hosting closed-door sessions for clients throughout much of the week and Sadoun said he was focused on three main areas at Cannes:

• First, understanding and recognising what “creative excellence” means in “such a fragmented media landscape” where it’s more difficult to have a meaningful “impact”.
• Second, sitting down with clients and showing them that “we are truly bringing value”, by using data and technology and driving business results.
• Third, engaging in “a real conversation with the platforms about the role they are playing versus the role we are playing” and working in a complementary way, “instead of fighting each other”.

Intelligent clients will want to keep using agencies, not bypass them

Meta recently announced it will be able to help brands to fully create and target campaigns using its AI tools by the end of next year – a move that has been widely seen as a threat to agencies because advertisers, especially small and medium-sized businesses, could bypass them – but Sadoun played down the potential threat. Agencies “shouldn’t be scared” by what he described as “a couple of PR announcements”, he said.

Mark Zuckerberg, the founder of Meta, has shown that he is capable of “genius” but also that he “could be wrong” on occasion, according to the Publicis CEO.

“It will be underestimating client intelligence to think that they are ready to put all of their money in a single platform – whatever platform [it is],” Sadoun said, giving a string of reasons why brands will be reluctant to rely wholly on the tech platforms.

“They [clients] want to take back control of their data. They don’t want to leave that data in the walled garden – none of them.

“They don’t want to pay their media with a credit card – as Mark said, ‘spend as you want’. They want to know exactly what they are spending.

“Even more important for this audience [of creative leaders in Cannes], they [brands] don’t want to leave their brand values to the platforms. They want consistency from one platform to another,” he said, noting that agencies have a valuable role to play in helping to produce a creative idea that can work across all media.

In addition, brands want to be able to measure themselves — “they don’t want the platforms to measure for them”, he said, especially given the need to manage media budgets. “I’ve been working with platforms for 15 years. I have never heard the platforms say to a client: ‘You're spending too much with us, you should pay less.’ It’s always more.”

For all those reasons, he was confident that the agency sector “has a bright future”, he said.

Global agency CEO is an “incredibly difficult job”

Sadoun has previously talked about how he felt as if Publicis, the top-performing agency group of recent years, was in danger of looking like “a good house” in “a bad neighbourhood” but he said he felt things in the wider sector could turn around as rivals undergo restructuring.

“I think this neighbourhood is going to get better,” he said. “The opportunity is bigger than our industry, if we shift our mind from being just a communications partner and truly understand that we are the only industry that can truly help our clients transform, because we're bringing all of those capabilities [across creative, media, data, technology and the whole customer experience, and connecting them]. The opportunity for all of us is bigger than the [core advertising] market.”

Sadoun added that the agency sector needs “strong competitors”, in a nod to Omnicom’s impending acquisition of IPG. “I am certain that, at one point, WPP will come back, too — they will put a new management in place and they will do whatever it takes,” he said.

“There is enough space for everyone, as long as we make the right investments, as long as we treat people well, which is one thing that I'm worried about because everyone is talking about cost savings and synergies.”

For Sadoun, ensuring Publicis recruits and retains talent is key. “It’s a people business,” he said, and Publicis is the company “that has invested the most in data and technology that is telling you this”. “My obsession is not finding new capabilities — [although] we are finding them. My obsession is to have the best people and make sure that the people that work at Publicis feel that they are in the right place.”

He acknowledged Publicis’ own restructuring and reorganisation before the pandemic had been “a very tough journey”. The role of global agency holding company CEO is an “incredibly difficult job”, managing a 100,000-person business such as Publicis or WPP, making the case for “bold investments” when shareholders might not be supportive, and also being an account executive who deals with clients and pitches, he said.

Sadoun praised Read as “a very tough but respectful competitor” who “had some very significant wins in the past when we lost to him”, even though Publicis has been winning a lot of business — such as Mars globally and Coca-Cola in North America — from WPP more recently.

The fact that Sadoun’s long-serving predecessor as CEO, Maurice Lévy, stayed on as chairman, “definitely” made a positive “difference” compared with rival groups and “made my life easier” in terms of dealing with investors, which meant he had “a real partner” for many years after he took charge, the Publicis chief said.

Asked how long he might stay as CEO — Read served seven years and Sadoun has been in the job eight years — Sadoun said it would depend on his board and his health, after he was diagnosed with cancer in 2022.

About 80 people attended the session at Campaign House at Canopy by Hilton Cannes. They included Keith Weed, non-executive director of WPP, Karen Martin, chief executive of BBH and president of the IPA, Matt Neale, global chief executive of Golin, and Jemima Monies, group chief growth officer of AMV BBDO.