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Advertisers have reduced major capital spending projects since the start of the year, according to the Publicis boss, who warned that the American tariff war would increase the prudence of the French agency clients.
The fortune of major advertising agencies is closely linked to those of consumer -oriented industries such as technology, retail, automobile and luxury products, with discounts in marketing expenses that have quickly struck their own net profit.
Until now, customers have continued to invest in marketing, said Publicis Director of Publicis, Arthur Sadoun, but companies had further reduced expenses in high capital intensity in the first quarter due to an attitude “to wait and see”.
He said Advertising “Could see a certain reduction in the budget in certain industries in the rest of the year due to the level of uncertainty.”
Sadoun said that a strong performance of the first quarter for the company would help him to compensate for any weakness throughout the year, which means that it could provide its financial guidelines despite potential reductions in customer marketing budgets.
The group said on Tuesday a 9.4% increase in net income to 3.5 billion euros and organic growth of 4.9%. He indicated that a record series of new customers had compensated for “deteriorating macroeconomic conditions” and reaffirmed organic growth directives of 4 to 5% of the year entirely entirely in 2025.
“This huge record in business in (the first quarter) will be … compensate for all the potential cuts that we could see from our customers because of this high level of uncertainty,” added Sadoun. “They are cautious, and you can certainly see this in major transformation projects.”
He has said that so far, the impact had been above all the share of its customers. “No one knows exactly what is the impact of the price on their business, and therefore everyone is preparing for a certain instability and the lack of visibility,” he said.
“What is absolutely certain is that if we want to avoid a crisis, we will need greater certainty and clarity.”
Publicis spent around 500 million euros in business purchase in digital media, influence marketing and data services during the quarter as part of a long -standing investment in the advertising industry sectors led by faster growth.
The Paris based group has become The largest advertising agency in the world By income at the beginning of the year, but he could lose this position later this year given the proposed merger of us rivals ipg and Omnicom. Sadoun said that this agreement was also an opportunity for Publicis to poach customers and attract talented staff from the combined American group.
