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Paris-based advertising agency Publicis raised its full-year outlook after a recovery in spending among its U.S. tech clients despite continued macroeconomic uncertainty.
Publicis said on Thursday that revenue for the first half of the year rose 7.7 percent to 7.7 billion euros, beating expectations, while earnings before interest, taxes, depreciation and amortization rose 4.9 percent to 1.4 billion euros.
The company said the growth was driven by a recovery in spending among technology companies, with the division’s revenue rising about 11 percent in both the first and second quarters from the same periods last year.
Publicis Chief Executive Arthur Sadoun told the Financial Times that U.S. tech clients are “starting to invest again” after cutting their marketing budgets last year. He noted still-challenging conditions due to political uncertainty and geopolitical tensions in the U.S., France and the U.K., adding that the company was upgrading its forecast “against all odds.”
Sadun added that Publicis is also benefiting from its investments in technology, with more clients using the company’s services to create and deliver personalized campaigns at scale for individual consumers — a trend that will only develop further as the use of artificial intelligence tools increases, he added.
Publicis now targets annual organic net revenue growth of 5-6%, up from previous guidance of 4-5%. The company is sticking to its existing guidance for financial ratios, targeting an operating margin before working capital changes of 18% and free cash flow of €1.8-1.9 billion.
Ad executives have grown more confident this year, with signs that brands are increasing marketing spend again and revenues boosted by big events ranging from the European Championship soccer tournament to the Paris Olympics. This week, PwC predicted that advertising revenues will surpass $1 trillion in 2026 and double in 2028 compared to 2020.
But Publicis has outperformed the industry as a whole thanks to investments over the past decade that helped launch its data consulting and technology divisions. The group plans to invest a further €100 million this year in developing AI tools and resources as part of a €300 million AI strategy designed to improve advertising customization and personalization.
Publicis clients are already using the company’s technology to target individual consumers with “the right message at the right time,” he said. The use of AI will give agencies additional benefits in “creating, producing and distributing content,” he added.
Sadoun said that although the French market currently accounts for only 6% of sales, it remains important as the company’s headquarters, and that the market has grown in the past six months despite the political and economic challenges facing the country.
