Publicis' Levy predicts upturn in ad spend for second half of 2009

by Arif Durrani, mediaweek.co.uk 10-Jun-09, 13:55

LONDON - Declines in advertising spend have bottomed out and growth is set to return in the second half of the year, according to Maurice Levy, chairman and chief executive of Publicis Groupe.

The comments by the leader of the communications group which houses media agencies Starcom MediaVest Group and ZenithOptimedia, were made at the group's annual general meeting yesterday (9 June).

Levy said: "The fall of advertising expenditures should be over. As we have already said, the second quarter of 2009 will be the toughest quarter, with an improvement coming in the second half of the year."

The French chief executive warned trading in the second quarter, which runs until the end of this month, would be worse than the first.

And he forecast global ad spend would fall further than the 6.9% predicted by ZenithOptimedia two months ago, to 8% this year.

Publicis Groupe, which is also home to the advertising networks Leo Burnett, Publicis and Saatchi & Saatchi, is currently battling to reduce its multimillion dollar exposure following the collapse of General Motors in the US.

Yet Levy remained confident group operations, which also includes digital marketing specialist Digitas, will gain market share over the next six months.

"In this environment, we are confident we will outpace the sector's average in terms of revenue, thanks to our position in digital and emerging markets," he said.

"Publicis Groupe will continue its strict cost control policy to record the best operating margin in the sector."

The optimistic outlook is in contrast to forecasts of a "weak summer" of advertising in the UK by Martin Sorrell's GroupM last week.

Adam Smith, futures director at GroupM, tentatively predicted "some sort of recovery in 2010" but warned "no previous ad recession has put household media names at risk like this one has".