A Case Study by Andrea Hartford Matt Sumner

PUBLICISGroUPe, S. A.

I N T R O D U C T I O N

Publicis Groupe is one of the largest advertising agencies in the world. Part of the

Big Four advertising agencies, Publicis has some tough competition. Although

Publicis was started by one man eighty years ago, Publicis has transformed into

a multi-billion dollar advertising media mogul with subsidiaries worldwide. Their

holistic approach and unique way of solving advertising problems has helped

them rise to the top.

H I S T O R Y

In 1926 at the age of 20, Marcel Bleustein started his advertising business, Publicis,

in Faubourg Montmartre, Paris (Publicis USA, 2006). Bleustein’s business was a

new way of going about advertising. He thought that the most important aspect of

advertising was creating a relationship with the consumer. Bleustein kept values

that he used everyday when running his business: attention to respect, staying

true to the customer’s product, customer satisfaction, creativity and total quality

(Publicis USA, 2006). Some say that Bleustein’s way of thinking was way before

his time, and that the concept of creating relationships with the consumers was

something that the advertising market did not adopt until almost 70 years later

then Bleustein.

With Marcel Bleustein’s innovative way of thinking, it is no surprise that Publicis

quickly became one of the most successful advertising agencies. By 1930 Publicis

had made headlines for being the first advertising agency to use radio as an

advertising medium (Publicis USA, 2006). Soon after Publicis had paved the way

for advertising in this new medium, the French government banned advertising

on public radio. This did not deter Marcel Bleustein. He soon decided that the

only way to prove that radio was a powerful advertising medium was to create his

own radio station and use it for advertising. Bleustein soon created “Radio Cité”

(Publicis Group, 2006). Bleustein did not stop after starting his own radio station.

He continued his endeavors and by 1940 he had started up his own network,

“Antennes de Publicis,” acquired movie theaters, and established “Régie Presse”

which was an independent subsidiary that sold advertising space for numerous

major newspapers and magazines (Publicis USA, 2006).

The second World War brought hard times for Publicis. Marcel Bleustein closed

his new advertising business, shut down his radio station and joined the French

resistance. When the war came to an end, Marcel changed his name to his

resistance name: Marcel Bleustein-Blanchet (Bramhall, 2006). With the war over,

Bleustein-Blanchet wanted to relaunch his business, but the bulk of the money

his business had previously made was depleted. He was starting over. However,

Publicis still had the loyalty and trust of many of the same customers that the

Publicis’ mission is to create amazing relevance for a company or brand

at every important point of contact and connection. Our approach is

called “La Holistic Difference” and our passion is to challenge conventions,

barriers, and problems with fresh, innovative solutions.

The PUBLICIS Mission

company was started with. Bleustein-Blanchet moved the Publicis business to a

more central spot and set up shop on the Champs Elysées (Bramhall, 2006). It was

here that Publicis acquired many high profile clients such as Colgate-Palmolive

and Timor. Bleustein-Blanchet’s Régie-Presse also expanded to offer the sale of

advertising space to public transportation vehicles (Publicis USA, 2006).

In 1957 Publicis made French history when they decided to expand by creating a

branch, the Publicis Corporation, in New York City. Publicis soon landed even larger

accounts with L-Oréal and Renault. In 1972 the Publicis building in France burned to

the ground.Soon after, in 1975, Maurice Lévy was named CEO of Publicis (Publicis

USA, 2006). Many have said that Lévy was given this title after Bleustein-Blanchet

saw him salvaging records from the burnt building. By 1986, the company’s 60th

anniversary, Publicis had 23 agencies

in Europe and the United States and

Publicis was the first French agency to

be in the world’s top 20 communication

groups (Bramhall, 2006).

In 1988 Publicis expanded and formed

an alliance with the Chicago-based

communication company: Foote, Cone

& Belding Communications (Bramhall,

2006). After five years this partnership

ended when Publicis also acquired

France’s Groupe FCA. Foote, Cone &

Belding Communications then created

a new holding company known as True

North Communications. By the early

1990’s Publicis Groupe had locations

on five continents and had acquired

many additional high profile clients such

as Whirlpool, Coca-Cola and L-Oréal.

Marcel Bleustein-Blanchet, founder of

Publicis, died in 1996 and his daughter,

Elisabeth Badinter was named chair of

the supervisory board. Soon thereafter

a feud developed between his daughters, Elisabeth Badinter and Michele Bleustein-

Blanchet. The feud ended with Bleustein-Blanchet selling her shares of the company

to Badinter, giving Badinter control of Publicis (Bramhall, 2006). Publicis continued

its success, ranking in the world’s top ten communication groups in 1999. By 1999,

Publicis now had locations in 76 countries and 130 cities.

Ke Y SU B S I D I a R I e S

a D v e R T I S I N g

* Beacon Communications (Japan)

* Fallon Worldwide (US)

* Kaplan Thaler Group (US)

* Leo Burnett Worldwide (US)

* Publicis Worldwide

* Saatchi & Saatchi Worldwide (US)

m e D I a S e R v I C e S

* Médias & Régies Europe

* Starcom MediaVest Group (US)

* ZenithOptimedia (UK)

S P e C I a L I z e D a g e N C I e S a N D m a R K e T I N g S e Rv I C e S (S a m S) * Arc Worldwide (relationship marketing & promotional campaigns)

* Bromley Communications (US, multicultural advertising)

* Lápiz (US, multicultural marketing)

* Manning, Selvage & Lee (US, public relations)

* Medicus Group (US, health care marketing)

* Nelson Communications (US, health care marketing)

* Publicis Dialog (sales promotion and direct marketing)

* Rowland Companies (US, public relations)

Publicis continued acquiring other agencies, buying the U.S. firms Hal Riney

& Partners and Evans Group as well as the successful advertising networks of

Saatchi & Saatchi, a British agency. Publicis then bought advertising agency Fallon

McElligott, marketing firm Frankel & Co., and media buyer DeWitt Media ending

2001 with strong positions in various media markets (Bramhall, 2006). In 2002

Publicis secured their position as one of the top four advertising conglomerates

in the world by acquiring Bcom3.

Publicis stays true to Marcel Bleustein-Blanchet’s core values placing their clients’

customers in the center. Publicis still believes that creative ideas and thoughtful,

unconventional solutions are what make the company stand apart from others.

They use a holistic approach that focuses on the whole result and is driven to

get results for their customers that will enlighten them and make them think in

innovative ways.

m A r k e t S S e rv e d / P r o d U C t S o f f e r e d

Publicis has expanded to be one of the largest communication firms in the world.

With all of it’s acquisitions over the years Publicis has expanded its offerings to

contain more than just advertising. Through their numerous acquisitions, Publicis

has become an advertising, media services and specialized agencies and marketing

services group (SAMS). Publicis and it’s acquisitions provide advertising in print,

interactive web media, television, and radio as well as direct marketing, target

marketing, branding, and other sales promotion services (Publicis USA, 2006).

Publicis has acquired several SAMS that help cater to their clients’ myriad of

specialized needs. For example, Bromley Communications specializes in targeted

multicultural advertising campaigns, while the Rowland Company’s provides strong

is public relations services and Nelson Communications focuses on health care

marketing.

CaSe STUDY: POWeRBaR

Although Nestlé’s PowerBar has paved the way for nutrition bars it was suddenly

being pushed aside by competitors and as a result, sales have declined for the

once leading nutrition bar. PowerBar originally targeted the “serious athlete”, but

soon became known to a wider audience, and the brand messaging focused more

on avoiding failure (Publicis USA, 2006). When Nestle approached Publicis for help

they performed a case study and realized that PowerBar was still better targeted

towards the “serious athlete” and they started a new campaign to revitalize the

company. Using the new tag line “BE GREAT”, PowerBar focused on individual

athletes and gave it a personal edge relating PowerBar with the athlete’s top

performances (Publicis USA, 2006). Instead of talking about the product, they

let athletes tell their stories about the challenges of performing at their best and

used this inspiration as it relates to sports nutrition. This campaign revitalized

PowerBar and featured print, public signage, direct mail, collateral materials and

a web site.

For each new client the Publicis try to create a new campaign that will fully embody

the message of their client and convey that message effectively to the product’s target

market.

Brand Idea

Be Great

Brand

Advertisingout of

Home

direct

marketing

In-Store Sports

marketing

Interactive

events

The thought process for the new look for PowerBar’s campaign “Be Great” along with a print ad for their new Pria bar for women and the new package design for the original PowerBar

K e Y C L I e N T S

Being one of the four largest advertising conglomerates in the world, Publicis is able to meet even the most

demanding of clients’ needs by providing a plethora of advertising and media services. Some of their clients include

BMW, Champion, Denny’s, GlaxoSmithKline, Hewlett Packard, Nestle, and Proctor & Gamble to name a few. In the

following section, specific print pieces for Proctor & Gamble, Heinz, and Altoids, and an overview of campaigns for

General Motors and Purina, illustrates the range of services and creative insight Publicis provides its clients.

Fiscal Year-End December

2004 Sales (mil.) $5,181.0

1-Year Sales Growth 6.7%

2004 Net Income (mil.) $284.0

1-Year Net Income Growth 50.3%

2004 Employees 36,000

1-Year Employee Growth 2.4%

* figures taken from Hoover’s Online

f i n a n c i a l i n f o r m at i o n *

K e l l o G P r o c t E r & G a m B l E a lt o i D S

retrieved from LeoBurnett.com, a subsidiary of Publicis Groupe, S. A.

G e N e r A L m o t o r S C o r P

A recent campaign with Cadillac of General Motors Corp. highlights the multi-

faceted advertising and marketing approach companies are taking these days.

Their recent work on Cadillac’s ‘Under Five’ campaign, based on the idea that the

cars can go from 0 to 60 in under five minutes, included a digital contest where

users would submit five-second films. This allowed them to develop a consumer

information database and also acted as “an interactive- marketing effort because

the consumers were creating their own content. It used mobile marketing because

some of the films were created by consumers’ mobile phones.” (Vranica, WSJ)

Mr. Landsberg of Publicis Group’s Arcworld emphasizes the need for today’s

marketing content to be bold and engaging. Consumers are presented with an

insane volume of content and marketing messages, and gaining the waning

attention of consumers is becoming more difficult.

P U R I N a

A client of ArcWorld a marketing service agency that is part of Publicis Groupe

recently launched an extraordinarily successful campaign for Purina that included

biweekly podcasts for pet owners. The campaign was so successful that some of

the podcasts made their way into iTunes, an strong indication of the campaign’s

popularity and success.

ArcWorld’s success with clients such as Cadillac and Purina exemplify the

increasingly important role that marketing service agencies are providing.

Marketing service agencies historically have received much smaller portions of a

client’s overall advertising and marketing budget. Advertising budgets have almost

always trumped marketing service budgets, but that trend is changing.

C O m P e T I T I O N

The competitive landscape that Publicis operates in can be defined as an

oligopoly. Four advertising and media services conglomerates account for 55%

of global advertising and marketing expenditures. These four large publicly-held

holding agencies have offices in over 100 countries, serve thousands of clients a

piece, and slugged their way to the top through the relentless acquisition of other

agencies when their current markets were tapped (Hoovers Online). Of these

four, Publicis was the last to join the ranks and did so in 2002 when it acquired

Bcom3 (Leo Burnett Co.)

S U C C e S S S T O R I e S

Publicis Groupe forced its way into advertising conglomerate limelight by

cleverly acquiring a string of larger advertising agencies. Previous failures in

creating alliances with other firms (Foote, Cone & Belding Communications in

the 90’s) heightened Publicis’s awareness in dealing with future acquisitions. The

acquisition of Saatchi & Saatchi in 2000 was much more successful, furthering

their market share. Then in March 2001, at the fiscal year end investors meeting,

Maurice Lévy, chairman and CEO of Publicis announced “a major deal: the

acquisition of the US Group Bcom3 (Leo Burnett, D’Arcy, StarcomMediaVest,

MS&L, Medicus, Pangea), along with a strategic partnership with the Japanese

market leader Dentsu.” The acquisition of Bcom3 has proven to be an essential

T h e b i G f o u r *(Figures in millions of US dollars.)

1. WPP Group 8,165.0

2. Interpublic Group 7,981.4

3. Omnicom 7,404.2

4. Publicis 4,769.9

*figures taken from (Cappo, 16)

factor in strengthening their market share in the US and Japan. “Now among the

top tier of global communications groups, Publicis is 1st in Europe and 3rd in the

United States, and is the global leader in media buying and consultancy.”

C O N C L U S I O N

In its 80 years of existence, Publicis Groupe S. A., has hurdled numerous obstacles:

war, botched alliances, family feuds, and the brutal competition that exists in the

advertising world. Now in 2006, the Groupe’s 80th anniversary, Publicis stands

strong as the world’s number four advertising conglomerate in the world. They

alone lay claim to almost 9% of all global advertising and marketing revenue.

Publicis’s countless acquisitions have provided them the versatility needed to

survive in today’s cross-media world and the tools to adapt to their clients’ ever-

changing needs. It almost goes without saying that Publicis became number four

for a reason, and as long as the company holds fast to their founding principles they

will continue to differentiate themselves from their competition, which according

to Publicis founder is the “fundamental law of advertising”.

S o U r C e S C I t e d

Joe Bramhall. (2006). Publicis Groupe S.A. Retrieved January 5, 2006, from Hoovers database.

Publicis Groupe. Retrieved January 5, 2006, from Source Watch Web Site: http://www.sourcewatch.org/index.php?title=Publicis_Groupe

Publicis in the US (USA). Retrieved January 9, 2006, from adbrands.net Web Site: http://www.mind-advertising.com/us/publicis_us.htm

Publicis USA. Retrieved January 9, 2006, from Publicis USA Web Site: http://www.publicis-usa.com

Viva La Difference, Publicis Groupe 2004 Annual Report. (2004). Retrieved January 5, 2006 from Publicis Web Site: http://www.publicis-usa.com

Cappo, Joseph. The Future of Advertising: New Media, New Clients, New Consumers in the Post-Television Age. New York: McGraw- Hill, 2003

Leo Burnett. Retrieved February 13th, 2006 from Leo Burnett Web Site: http://www.leoburnett.com