Publicis Groupe on Journey from Holding Company to Platform - But What Does it Mean?
“It starts like this... with some nerves.”
It was a big day for Publicis Groupe and CEO Arthur Sadoun as the revealed ‘Sprint to the Future', the next phase in the holding company's internal and external transformation from patchwork of brands and capabilities to a unified and future-facing offering. This new phase also sees them take on the consultancies more aggressively than ever.
Making the day particularly nerve-wracking, their audience was the financial and investor community, which has been notably pessimistic on the prospects of the entire ad industry in the past few months. But the decision to address the challenges in the wider business environment and to openly talk about the challenges and successes of running whilst changing was a show of confidence. And that confidence was reflected in projections – by 2020 when this reorganisation should be complete, the Groupe anticipates 4% organic growth.
When the Power of One was first revealed in 2015 and the mysterious AI platform Marcel first surfaced in Cannes last year there were raised eyebrows across the industry. But, having Marie Kondo'd the Groupe’s organisation and focus in public, the Groupe has turned a corner. The past two years have been the phase of crunchy, difficult change, building a foundation, breaking silos and trying to bash heads together, now they reckon they’re ready to accelerate.
Arthur paid tribute to his predecessor Maurice Levy, who started Publicis off on the road to transformation. “What Maurice did with the Power of One was extremely courageous because when you are working with selfish people who think they are the best and explain that they have to work together. The shift in priority, culturally, thanks to the Power of One over the past few years has been amazing. It has been tough because change is tough, and it’s now really working.”
The Groupe argues that they are in the process of transforming from a holding company to a platform, taking on not just rival agency holding companies but the tech giants and consultants. The strategy relies on focussing on data, dynamic creativity (personalisable, responsive content) and digital business transformation and simplifying client relationships by giving them single points of contact and P&Ls.
As for concrete examples of the platform approach, there were two: PeopleCloud and Marcel. PeopleCloud is a unified data and analytics platform that crosses the whole Groupe, from media and data to creativity and consultancy. And as for Marcel, the audience got a glimpse of an internal tool that connects, organises and prompts talent.
Emmanuel André, Publicis Groupe’s Chief Talent Officer hinted at the pro-active nature of Marcel, a tool they hope will connect the company’s employees, provide a training platform, and integrate productivity tools such as calendars and emails. "At the beginning we thought Marcel was an assistant, an assistant being a helper - if it’s only an assistant then its dependent on the quality of the questions you’re able to ask, we think that Marcel should be an instigator.”
Talking to a room full of money minds, they faced tough questions. When asked about their unified data and analytics platform Publicis PeopleCrowd and whether it really was different from rival holding company offerings, Arthur was bullish, arguing that their ability to connect data from different sources and the way that they are giving clients ownership of the data (as opposed to hiding it behind walls and using it to build Publicis' own business as the tech platforms do) make it unique.
On what the internal transformation and Power of One mean for the agency brands – and whether it threatens them, Arthur had this to say:
“Brands are extremely important to us, for two reasons. The first is that for a lot of cases it’s through brand culture that we attract the best talent and Saatchi’s is a fantastic example of that. And of course we could talk about Leo Burnett, Publicis Worldwide, Fallon, BBH are great brands and part of what we’ve done so far is that our brands need to stay very strong.
“Now to be provocative… do we need 80 offices for Leo Burnett? I don’t think so. I would prefer to focus on fewer centres of excellence…. And even then, we need our brands to manage our conflict because our clients want to belong to an organisation that is their organisation. So brands are important for the conflict, for the culture and, by the way, it’s part of our heritage and as you are seeing we are not shifting away from creativity. Creativity is still our raison d’etre.”
While the Groupe is still midway through transformation, they had successes to share. With Procter & Gamble, they said that while the agency roster had reduced from 6,000 to 2,500, the Publicis agency count had remained the same, granting them a bigger share. According to Michael Wood CEO of PG2 (Global client lead on P&G), the giant client was one of the earliest to benefit from the Power of One approach. In order to meet their needs, the Groupe needed to change fundamentally. “You cannot transform around your clients if you cannot restructure as a holding company,” he said.
From the earliest beneficiary to the newest: the Groupe was also keen to talk about the recent Mercedes-Benz win and the formation of dedicated agency Publicis Unit. Parent company Daimler had provided a 92-page brief and as the seven-month pitching process progressed, the potential of the new Groupe model became increasingly apparent, explained Publicis Emil CEO Justin Billiingsley.
“This is a great recent example where I can assuredly say we only won because we brought these three things together,” he said, referring to the data, ‘dynamic creativity,' and digital business transformation pillars. “This was no creative pitch; we were clearly told don’t bring any creative ideas, we’re quite sure we can work with any of you to make great work. This is not a race to the bottom so don’t try to beat each other on cost. We’re looking for a partner to help us transform. This was a transformation project; specifically, this was the largest pitch that’s happened in many, many years because it was completely end-to-end, it covered the entire consumer journey. Because Daimler had realised the advantage of working with different specialists was now less than the advantage of working with integrators.”
The Mercedes win certainly seems to have buoyed the top leadership’s confidence that they’re moving in the right direction. Having invited the money folk in ‘to see the kitchen’, as Arthur put it, the Groupe hopes that transparency and connectedness will be the recipe for the success.