When we think of advertising agencies, we instantly think of traditional print and TV ad campaigns that many of us are no longer paying attention to. And whenever I think of CEO’s of the advertising giants that make these campaigns, I think of old men who are hoarding their advertising profit margins and are resistant to change to the new ‘unsexy’ world of decreased margins in the digital space.
However, I am completely wrong. Industry leaders like Martin Sorrell, CEO of WPP Group (2nd largest advertising group), and Maurice Levy, Chairman and CEO of Publicis Groupe (4th largest), are fully embracing the digital world and are transforming their agencies into digital power houses.
I was really fascinated after I heard Maurice Levy speak in a recent Cambridge University podcast, From National to Global, where he discussed the importance of digital in the future. And Mr. Levy is definitely putting money where his mouth is. Even in horrendous economic times, Publicis Groupe has been able to outperform the industry by a large margin and is currently positioned number one in the industry after raking in $4.8 billion in new business wins for the first nine months of 2009. In a recent interview for EBM after Q3 revenue announcement, Maurice credited this victory to the growing investment in transforming Publicis into an all-digital agency, saying that this investment is already starting to pay off.
Currently, digital accounts for 21.3% of consolidated revenue and Publicis hopes to grow this number to 25% by next year and to 100% by 2015 (the 100% was a joke ). But I wouldn’t be surprised if that was the master plan after-all, as Mr. Levy certainly believes in the power of the internet or as he likes to refer it to as the power of digital. Maurice truly believes that digital is changing our society which can be seen through the tremendous growth of social networks (Facebook, Twitter, etc.) and how they have impacted our culture. At the end of the day, advertising is all about society and if advertising agencies want to succeed, they have to reflect the society through its campaigns and mediums where people absorb information on a daily basis. Like it or not, the future is in digital and this is exactly why Publicis Groupe is slowly being transformed into an all-digital agency.
My only question is- will most agencies follow suit? Or will they keep ignoring the paradigm shift that has already happened?
I would recommend listening to the full Cambridge University podcast featuring Maurice Levy below to fully understand Mr.Levy’s genius.
