Publicis Groupe, the world’s fourth largest marketing services company, has given its clearest indication yet that it might follow in the footsteps of its rivals with the creation of a single media buying point outside of the US.
The news comes as the French-owned holding group for ZenithOptimedia and Starcom MediaVest revealed plans to create a new management structure for its media buying and planning arms, called Publicis Group Media.
Publicis said that the new management board will look to combine buying operations in some contries to obtain better prices for its clients. However, it emphasised that this would not include the US where it has already sufficient buying power.
The Publicis Groupe Media management team will be led by Roger Haupt, chief operating officer of Publicis Groupe; Jack Klues, chief executive of Starcom MediaVest Group and Steve King, the recently appointed chief executive of ZenithOptimedia.
Commenting on the launch of the initiaitve, Klues said: “We have been targeting strategic improvements, primarily in some key Western European countries, and we intend to make some investments in select core markets relatively quickly.”
He added: “We will never combine our buying strength in the US, where our companies already enjoy sufficient clout to provide optimum pricing to clients, but will explore the viability of such a move in other markets where industry practice allows and where clients can benefit from fortified negotiating power.?
Public Group Media will also look at consolidating the back office operations of certain agencies to generate greater efficiencies. However, it emphasised that this will not involve a merger of its planning and buying arms Starcom and ZenithOptimedia.
Publicis also announced an impressive 23% increase in net profits in the first half of this year as the impact of consolidation activities led to a lower tax bill. The compact reported â‚Ź80 million in net earnings in the six months to June, up from just â‚Ź65 million in the same period the previous year.
Maurice Levy, Publicis chairman and chief executive, said: “Strong first-half results confirm steady progress towards our goals for profitability and finances. The impact of our Focus on Cash program is already apparent and should in time significantly enhance our cash generation capacity.”
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