Publicis tumbles as revenue shortfall jolts Madison Avenue

Bloomberg

Publicis Groupe SA is setting off alarm bells on Madison Avenue as the ad industry’s earnings season gets under way.
The French owner of Saatchi & Saatchi and Leo Burnett Worldwide suffered a surprise drop in fourth-quarter sales, blaming cuts in ad spending by consumer brands in the US. So-called organic revenue fell 0.3 percent in the quarter, missing the 2.5 percent gain that analysts had expected, according to a company-compiled consensus.
Publicis shares slumped as much as 14 percent at 9:54 am in Paris, their biggest intraday fall since the day after the September 11 terror attacks in 2001. US rivals Omnicom Group Inc. and Interpublic Group of Cos. fell at least 5 percent after the results, while London-based ad group WPP Plc fell 6.3 percent.
Conventional advertising has been in decline as consumers turn away from newspapers and traditional TV, forcing ad companies to market themselves as online data-mining experts who can help clients target shoppers more effectively.
Publicis’s results suggest marketers at major brands have yet to fully embrace the company’s strategy. The Paris-based group counts Campbell Soup Co. and JM Smucker Co. among its
consumer-goods clients.
Longer-term success isn’t guaranteed either: Alphabet Inc.’s Google, Facebook Inc. and Amazon.com Inc. are growing quickly at the expense of traditional players in advertising by harvesting unprecedented quantities of consumer data and using it to target ads.
“We clearly have a revenue attrition on traditional advertising from fast-moving consumer goods in the United States,” Chief Executive Officer Arthur Sadoun told reporters.