Arthur Sadoun on ‘massively increasing gap’ on rivals, winning in creative, and rethinking Cannes

Publicis Groupe is “massively increasing the gap between us and our competitors” in terms of revenue growth and profit margin, Arthur Sadoun the chief executive, has claimed.

The boss of the world’s biggest agency group said its Q2 revenue growth of 5.9% and revised forecast that it would hit the top end of its guidance for the full year, showed “there is a lot of value to unlock” for big agency groups, even though some of his rivals have been struggling.

“The financial markets and the press are wrong to talk down our industry” and fears about clients bypassing agencies and going direct to media platforms in the age of AI are overblown, he said.

“I’ve heard for nine years now that the platforms will eat us for breakfast. Since then, Publicis has doubled revenue and more than doubled its market cap,” he told Campaign. “It’s really time to stop this BS about the fact that platforms will make us disappear.”

Sadoun also discussed why Publicis’ creative operations grew in the high single digits in Q2, in contrast to most of its major rivals, and how Cannes Lions should improve the integrity of the awards in the wake of a row about fabricated case studies, including an entry from Le Pub in Brazil.

“It's our job as holding company CEOs to set stricter rules about what needs to be done [at Cannes] and I'm sure that we will in the coming months, particularly with Cindy [Rose, the new chief executive of WPP] coming on board,” he said.

Sadoun was bullish after recent big wins, including Mars. While much of the industry is dealing with “cuts, restructuring and succession planning”, Publicis is “focusing only on its strategy” and “executing that strategy”. That means “winning market share”, continuing to make acquisitions to “enhance our AI strategy” and “last but not least, talent, talent, talent”.

“It is a service business” and “we’re going to continue to accelerate in opportunities to attract and retain the best talent”, he said.

Campaign: WPP downgraded its annual forecast and said Q2 got harder as the quarter went on in terms of client spending, especially in June. Omnicom had a slightly different message, which was that Q2 was steady and it hadn't seen conditions get worse. What has Publicis’ experience been?

We delivered an extremely strong quarter, particularly in what is a challenging environment. We haven't seen any change from Q1 to Q2 [in terms of pressure on revenues]. The fact that we are delivering a stronger than expected Q2 with roughly 10% revenue growth, leading to 5.9% in net revenue organic growth is the best expression of that; 5.9% in net revenue growth means roughly double-digit growth when you count like Omnicom, in our case [because Omnicom does not disclose net revenue less pass-through costs].

The 5.9% is ahead of consensus [expectations from analysts] and is ahead of the competitor pack that is roughly minus 2%, when you look at net revenue. We have a roughly 800 basis points [8%] difference between us and [the] competition at this stage, over the quarter [versus his estimated net average for WPP and Omnicom].

Your H1 growth is 5.4%. So you are expecting a slower H2 – somewhere under 5% and that factors in what you say is “anticipated reductions in client market spend”.

The main reason we are expecting an H2 that is a bit slower is not the conditions. It is the fact that the comparables are higher [against last year for Publicis]. It will still be a very strong performance – we're talking about 4.5% growth in H2, again outperforming our competitors. Now, we are also anticipating that the uncertainty sentiment that we have seen in H1 could materialise in some cuts in Q3 and Q4, particularly in Q4, which is an adjustment quarter.

While you say you're upgrading your guidance for the full year from between 4% and 5% to near 5%, really you’re more confident that you can come in at the top end of existing guidance. Is that fair?

We are upgrading because we had an historical net new-business run and so we are expecting all of this new business to start to materialise in H2 in a way that will mitigate any cuts that we can see due to the current macroeconomic situation. Now, I also want to be clear we are not anticipating any impact in H2 on the biggest win we had at the end of Q2 [Mars’ global media account]. This is not why we are upgrading our guidance — this will only start to impact in Q1 [2026].

You also increased profit margin slightly in H1 and you say it should increase for the full year.

We have the highest margin of the industry by far, and continue to improve while we are leading in new business. So we are making again a clear demonstration that we are not buying market share. We have a commercial offer that reflects the value we’re bringing, and this is why we are growing not only the top line but we're also growing the bottom line.

We are roughly 600 basis points [6%] better versus our peers in H1 when it comes to margin. The gap is increasing both in top line, by 800 basis points, and in bottom line, by 600 basis points... We are massively increasing the gap between us and our competitors.

In terms of the revenue mix, Connected Media grew by a high single-digit percentage and the technology-Sapient business was roughly flat but perhaps the surprise is revenues from Intelligent Creativity – from creative, production and public relations – were up strongly.

What is very interesting is our creative business is growing high single digit when all of our competitors are negative or flattish, but more negative than flattish. It's due to two things, our production backbone, that is far superior to the competition, and the fact that we are winning business in terms of creative. Not only are we growing high single digit but we had a great Cannes with real work for real clients, where we ended up with Axa [a Publicis client] as brand of the year and Publicis Conseil was twice agency of the year [after previously winning in 2024].

Why are you winning in creative?

If you want to win in the creative world, you need two things: you need to start thinking differently in terms of ideation and how [AI] agents can help you gather more insights to do great work. And you need the best production platforms that are not only delivering dynamic content – because, thanks to AI, everyone can say that now – and have a very nice UX, you need this production platform to be connected to the data. The big problem is now there is a profusion of content, but it's not content that is intelligent content, that adapts to real business goals, content that can be measured, content that can be reduced when it's not necessary. This is the name of the game.

In some ways, Publicis had a good Cannes, although we know you don't try and compete on winning the most creative company because your three big competitors [WPP, Omnicom and IPG] were in the top three rankings. But one of your agencies, Le Pub, came under scrutiny because of problems with its entry for New Balance in Brazil and there has been an issue with fabrications in some other entries from some rival agencies.

On Le Pub, it is very simple. They took the necessary disciplinary action – it has been dealt with. The wider question you are raising is are we doing the right thing in Cannes at the moment? I believe that we have initiated that at Publicis a while ago, meaning we are limiting the number of entries to real work and real investment, and when it's not the case, we take disciplinary action.

But it's mostly the case [that Publicis is entering genuine work] and a great example of that is Axa. Making Axa the creative brand of the year is a big thing. It’s a big client that is not creatively driven at the beginning, because it’s not a CPG client, [and operates] in a very regulated category that is financial services, that finished the most creative brand of the year.

We are definitely limiting entries because we are not playing this "number of medals" game, which I think should stop.

We have a very light infrastructure [in Cannes], if you look at how we are organised. We limit the number of attendees to creative and people that have to manage clients. We don't organise big parties or fancy things. And, even more importantly, we make sure that Cannes is useful for our clients, which we did with the closed-door sessions we had this year about the “AI Upside” in the downturn economy.

Yes, we want to make sure that our work gets rewarded, and the biggest work needs to be rewarded, but I would say as importantly, we consider Cannes is a big investment for everyone, and it has to pay off better in terms of value for our clients and for ourselves.

And in terms of the awards?

If you ask me, the person that talked the best about that is Rick Brim [co-founder of Ace of Hearts and former chief creative officer of Adam & Eve/DDB] in Campaign. I would not change one word about what Rick Brim said about where the festival should go.

It's our job as holding company CEOs to set stricter rules about what needs to be done and I'm sure that we will in the coming months, particularly with Cindy [Rose, the new chief executive of WPP] coming on board.

It's a [responsibility for] creative leadership to set the rules for the jury — and, again, I will not change one word about what Rick Brim said about that.

In your investor presentation, you were criticising analysts and some of the press for talking down the industry, and we’ve seen quite a lot of recent coverage around WPP, suggesting that the reason that it is under pressure is the rise of AI. So why have some analysts got it wrong?

I don't like the word "criticising", if I may. I am saying that the financial markets and the press are wrong to talk down our industry as we are making the demonstration that there is a lot of value to unlock.

I am spending 90% of my time with clients and the thing that I can tell you is that they need more than ever a trusted partner to get into this AI-driven world.

Our clients know perfectly that they need to own their own data and not be dependent on the walled gardens, [they need to manage] the entire media ecosystem and not be dependent on the platforms. They will have to protect and build their brand’s value in this area if they want some differentiation, and it's all going to be about transparent measurement that those guys [the platforms] can’t bring.

As an industry, we are the only one[s] that can connect all of those imperatives and I think what we are doing in Q2 is to make the demonstration that there is a lot of value to unlock for players like us – as long we are able to transform. And this is going to be even truer when we move from four to three main players.

So are analysts wrong to think that AI is the biggest issue for companies in the sector and why some of them are not able to change fast enough at the moment?

Basically what the market is saying is that AI will take us down and it will give all the leeway and freeway to the platforms to rise. I've heard for nine years now that the platforms will eat us for breakfast. Since then Publicis has doubled revenue and more than doubled its market cap.

So, again, I think it's really time to stop this BS about the fact that platforms will make us disappear — this time, through AI. What the market needs to understand is: we will never be an AI company. We are a service business. And the reason why Publicis is working well today is because we have the best talent bench on one side ... and we have the best platform of our industry, because we basically invested €12bn in data technology and AI.

So for us, AI is only an opportunity: an opportunity to make our clients grow faster and then grow faster than the competition; an opportunity to make our structure leaner and more effective. We have been dealing with AI since 2017 with Marcel. AI is everywhere in what we do with media. AI is everywhere in what we do with our production platform. AI is starting to be everywhere in the ideation process.

And what you see today is that we have a double-digit growth when it comes to our revenue, with an organic growth that is 800 basis points [8%] better than the competition’s, thanks to this. So the last thing we should do is be scared about AI. We just need to make sure that we embrace it properly, and when we do, we are doing well.

You've talked a lot about going from four to three big agency groups. Omnicom CEO John Wren recently spoke to Campaign in Cannes, and said how “being number one and number two isn't a free pass”. He said: “All it means is you have entry into the stadium. You still have to deal with different issues and competitors, but it allows you to be an important participant in the future.” What different competitors do you see, outside this new big three?

I think John said it better than I would. Being part of the top three gives you entry to the stadium for what are the big global new business [opportunities] and, as you know, 100% of the pitches [for the largest clients] are won by the top four at the moment — that will become top three.

Now, it's very fair to say that the overall competition is way broader than that. If you look at our holding company industry, when you look at creative, for example, we are fighting against all the indies and smaller players and this is why it's particularly remarkable to see that we are growing high single digit in creative while our holding company peers are flat or declining. When you look at the Sapient business, we are fighting against Accenture or Deloitte every day. So, of course, we have a large [range of] competition that goes from indies shop in creative to Accenture on the other side of the spectrum. 

But when it comes to global new business, there are four players today, winning 100% of the market share, and there will be three very soon.