As Publicis Groupe marks its 100th year, the company finds itself navigating an industry in flux—one being reshaped by economic pressures, relentless restructures and the impact of artificial intelligence on talent and business models. Against this backdrop, Arthur Sadoun, chairman and CEO of Publicis Groupe, reflects on the Asia-Pacific region and its unique challenges and local market complexities, from the walled gardens of China, Korea and Japan to the pace of consumer adoption of AI in India, and the scale of influencer marketing across Southeast Asia.
Sadoun takes aim at competitors for failing to keep pace as he shares the organisational shifts that have defined Publicis’ last decade, the role APAC now plays in driving global innovation, and the cultural foundations he believes have supported the Groupe’s longevity.
Campaign: As Publicis outperforms many competitors, what are the key factors behind its financial strength in Asia?
The ingredients of our success globally are the same as for APAC but they have been extremely well executed in this region. Which is perhaps why the gap between us and our competition is bigger in Asia, especially in China. This year, we are growing by 5.8%. We have double-digit growth in Japan and Korea, almost double-digit growth in India and Southeast Asia, and high single-digit growth in Australia. In China, we are number one when it comes to media.
While competitors are talking about reducing headcount to increase margins and thousands of people are being fired, we continue to invest in talent. We have never considered human labour as a debt; people are our biggest asset and even in tough times such as Covid, we didn’t fire people but reallocated resources.
Yet our competitors communicate to the investment community that they consider people as a debt. These competitors are living in a dream; they believe that tomorrow we will all be functioning as ‘synthetic’ companies. Publicis will never be that. Yes, we are advanced in AI, data and technology, but we are a services business and the first thing people will buy is people.
Secondly, we have invested in the best capabilities. In Asia, we went from big partnerships with identity companies to give us scale to making some key acquisitions such as Lotame.
Lastly, we created a world with no silos.
You hear others talk about ‘Company A media’, ‘Company A creative’, ‘Company A blah blah’. We did the same as what WPP has just announced, but we did it 11 years ago. We created Publicis Media, Publicis Creative and Publicis Sapient in 2015. But the big difference is that we didn’t stop there because these were still silos in the business. We went on to create a country model to go end-to-end from data to media to creative to technology; we integrated our capabilities in a seamless way.
Campaign: What challenges did you face with the integration of the country model in Asia?
It was very painful because it meant that everyone was losing P&L responsibility. Some of our people hated it. Today, there is only one country P&L owner in China, and that’s Jane [Lin-Baden, APAC CEO]. I only look at the country P&L. I don’t care if creative is doing better than media, or if media is doing better than data. I care about giving our clients the best and most advanced end-to-end model that will grow their business, and consequently, grow our business.
That's a major shift that our competition is not ready to make. We have this saying, ‘no silos, no solos and no bozos’. This means you need to be ready to get rid of the bozos. This is where things get difficult. Until then, you are just managing egos, but we were crystal clear and we went hard on that.
Campaign: With Asia-Pacific now driving more global revenue and serving as a major growth market for international clients, how do you see its strategic role within Publicis Groupe?
Asia is a centre of innovation and by far the biggest net exporter of innovation in products and AI for the group. We don’t have any big pitch where we don’t have someone from Asia teaching people in the US what needs to be done. They aren’t just explaining what’s being done in the region, but they are taking a leadership role and showcasing the capabilities that can be developed globally that come from Asia.
Although China is number four in terms of size, in many cases, it is the number one or two market for our clients. If you look at our top 10 clients, including the American giants, most of them will have China within their top two markets. So, while China may not yet be comparable to the US in terms of scale, it is strategically as important as the US for many of our biggest clients.
APAC contributes to our growth model; it helps us tremendously in terms of innovation and it is a place where our biggest clients have huge interests – if not their most important interests. These clients are learning from what we are doing in Asia, particularly in categories such as beauty. These are very challenging markets in this region, but we have demonstrated through our numbers that we have cracked the code in Asia and are the only ones to do it at scale.
Campaign: How do client expectations differ between emerging Asian markets and mature Western ones?
Most companies are realising that leveraging AI is not that easy and it’s difficult to scale. It’s expensive and, so far, hasn’t produced business outcomes at scale. This is because there is a big disconnect between the adoption of AI by consumers and by companies. What’s interesting is that AI adoption by consumers is higher in Asia than the rest of the world. Which means that companies have to go even faster in adapting to the new world in this region than anywhere else. And, the big difference is the speed of adoption of innovation. India has the highest adoption rate of AI in the region and that’s why the US is closely watching what’s being done in China. You have the walled garden of China, Korea and Japan and there is no single media platform that unifies Asia. So, it is an imperative in this region to find local solutions and accelerate on innovation faster than anywhere else because consumer adoption of AI, data, technology and platforms is also faster than anywhere else.
Campaign: As Publicis marks its 100th anniversary, what aspects of its culture or structure have been most critical to its longevity?
We are here for the long game, and that’s why we continue to invest. The big difference with our culture and, unlike our competitors, we are not cutting costs or buying back shares. We are focused on a growth model. We have made some strategic bets that are paying off today.
We are an independent company that was born as a small agency in Paris, not in the US or the UK. Paris is not the centre of the world, but we made our success organically. We put people and clients first and kept an entrepreneurial spirit. We were not afraid to invest, take risks and place some bets.
In 2017, we said AI will matter. Everyone said how crazy can this be to think that one day AI will have something to do with creative. We decided on top of that not to go to Cannes. The truth is, at the time we have been shocked by the financial markets, we have been trashed by the media and knocked by our competitors. Our market cap went down but then multiplied by 5 and 6, while our main competitors went from where they were at the time to where they are today.
Campaign: What is APAC’s role for the next 10 years?
When I took my job as a CEO, the first trip I made was to India – even before the US. It was 2017, and I it was my first town hall as CEO. There were hundreds of people attending and the last question asked was, ‘How would you measure success in 10 years?’ That’s basically now, as I’ve been in my job for nearly 10 years.
I gave a very simple answer at the time, which I truly believe about my legacy. I said, I will have done a good job if I have secured a future for our people. Ten years later, I think we did that. India is a very important country for us as it’s where we have a big part of the engineers that work for Sapient and for our global services in general, with over 25,000 people there now. It doesn’t mean that we don’t have a lot of challenges ahead of us in the region, but we have secured a future for our people in this new AI world. That’s the important legacy of the last 10 years.
We are a global company based in France, with equal distance to Asia and the US. APAC will have an increasing role to play in our organisation, not only because it’s a place of growth for our clients and the level of innovation, but also because it is one of the biggest parts of the world.
Campaign: What are the leadership qualities critical to success?
We want leaders who are practitioners. Sometimes we fail in recruitment because when you are in Publicis, you are in the trenches. Personally, I spend a lot of my time writing decks and making sure that what we say to the client is right. I don’t spend time with investors or with the press except for the earnings. We spend time with our clients. When we make senior hires, we are being very deliberate and telling them to be careful because they are going to come into a very big job at a successful company, but we are going to ask that they get their hands dirty and if they’re not ready to do that, they’re not fit for our culture.
I strongly believe that the day you stop loving your clients and you don’t want to be with your clients 80% of your time, you should change jobs. This is a business where you learn and grow through your clients and if you lose that, you lose the belief in this business.
If you look at all the board decisions I’ve taken, they were all influenced and driven by what I learnt from our clients. When we invested in identity with Epsilon, it was because we had clients telling us we can’t lose control of our data with the walled garden. We initiated the country model because clients said you can’t come to us on one side with creative and the other with media. When we invested massively in influencers in the last three years, it’s because we realised this is where clients wanted to invest most of their money.
Even when we created Marcel, it was because clients were saying we want to have access to all of your talent and we want your scale to be an advantage for us. Every decision that we take is driven by our clients. Zero decisions that we take are driven by our investors.
Campaign: How are you preparing the next generation of leaders?
The next generation is the big question for us. We have a duty to prepare the next generation to take over Publicis in the next 10 years. We have a second line of people that will take control of the company in the next decade and some of the names are from Asia. Our job is to ensure that we will do a good transition and that we will give them the means to be successful and to drive Publicis to new heights. That’s going to be a big part of what we have to achieve next.
Source: Campaign Asia-Pacific
