Publicis geographical revenue profile getting closer to Omnicom

The strategic benefit gained by Publicis from buying digital assets in the US and Europe is vividly displayed in the quarterly results published last week. 
Like most businesses, Publicis retains strong national ties with its French birthplace and past attempts to balance that domestic presence with an equally strong penetration of overseas markets have sometimes been frustrated, such as in the Foote Cone & Belding link-up that was aborted in 1996 and its seemingly unrewarding inherited alliance with Dentsu.

But the situation has been transformed by its acquisition of Digitas and Razorfish – two US based digital businesses.  By using new media as something of a Trojan horse, Publicis has taken the US market by storm and strengthened its European presence at the same time. 
In the first quarter of 2011, 42.7% of revenue growth at Publicis came from North America, while a further 32.3% came from European markets. 
As a result Publicis is now generating 49% of its revenue from the United States and Canada, while Omnicom relies on its home territory of the United States for 52.4% of revenue.   Even after discounting the Canadian component, Publicis has become a seriously strong rival to Omnicom on its own turf.  And that’s been made all the more threatening because of the large digital dimension in the Publicis armoury. 
However, there is a limit to the scope for North American expansion now that both Publicis and Omnicom have such a large presence there.  That is well illustrated by the fact that Omnicom derived nearly 60% of its income growth in the first quarter from outside Europe and the United States.   Yet even after doing so, Omnicom’s revenue from those territories was only a slightly larger proportion of its total than Publicis experienced. 
Before getting too excited about Publicis progress, there is one more financial fact to remember.  The two groups’ geographical revenue mix may be getting more similar, but Omnicom’s total global revenue is still nearly twice as great as that of Publicis. 
Bob Willott is editor of “Marketing Services Financial Intelligence” at

  • Matthew Charlton

    Very interesting Bob as always