Maurice Lévy the CEO of advertising agency holding group Publicis Groupe, just admitted his company’s lousy results in the last quarter were his own personal fault: He was distracted by the doomed, $35 billion merger with Omnicom that would have created the world’s biggest agency network but collapsed in May.
Publicis — which owns agencies including Saatchi & Saatchi, Starcom MediaVest and Leo Burnett — reported organic/like-for-like revenue growth of just 1% to $2.2 billion (1.7 billion Euros) in its third quarter, which picked up slightly on the previous quarter but was not in line with expectations. Publicis also said the full-year results will be similar to the first nine months — a very low level of growth.
On the company’s earnings call Lévy said the blame for those disappointing results should be placed on him.
“I should take responsibility for that. We have been too much focused on our project [with Omnicom] and we are paying the price for that.”
What makes the confession all the more surprising is that Omnicom also reported quarterly results this week and not only did its boss John Wren barely mention the merger, but the company reported solid earnings.
Lévy referenced this in the call and basically admitted that Publicis was obviously the more interested party in the merger than Omnicom:
“[Omnicom] probably did not believe much in the merger, maybe believing more in the takeover and that has really been the difference.”
Lévy even scolded an analyst for “reading too much into” his statement in Q3 earnings report that read “management was too focused on other plans.” (It’s extremely unusual for a CEO to suggest to analysts that they ignore the verbiage in their own earnings statements.)
Lévy said: “It’s all rhetoric, our ‘other plans’ is pure rhetoric because I was fed up of mentioning the merger and I decided I will not mention any more the merger. It’s pure rhetoric.”
“The only thing which has been keeping us [unfocused] is the merger, far too much. I recognize and I have said it already bluntly at our last call I was personally and my team too much focused on this.”
Now, however, Lévy believes the vast majority of Publicis’ issues are behind it. Other challenges had included a “sharp decline” in analog advertising (down 3.1% in the quarter) and the underperformance of its Razorfish agency.
Publicis says on Nov. 7 it will announce a new 2018 strategy plan aimed at growing the business by more than 100 basis points and its margins by at least 200 basis points over the next four years.