Publicis shares drop 13%, lowest since 2012
The development underscores the tough economic environment advertising agencies face, especially due to competition from Google and Facebook, and clients tightening their budgets
It has been reported that media conglomerate, Publicis' shares fell to its lowest since 2012 following yet another cut in its full-year sales target. Publicis' shares dropped 13 per cent on Friday, prompting investment banks Macquarie and Societe Generale to cut their recommendations on Publicis, with SocGen cutting Publicis to “hold” from “buy”.
The development underscores the tough economic environment advertising agencies now face, especially due to competition from Facebook and Google, as well as from major clients tightening their budgets. On Thursday, Publicis reportedly said it now expected sales to fall by nearly 2.5% on an underlying basis, compared to an earlier forecast of “broadly stable net revenue”.
Publicis Chief Executive Arthur Sadoun, who took over from current Chairman Maurice Levy in 2017, promised to offset the decline in ad spending by moving the business towards consultancy groups. He also plans to integrate technology with that of traditional creative marketing campaigns.
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