Friday, March 1, 2024

Publicis plans €300mn AI investment after exceeding growth targets -Dlight News

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Publicis will invest €300mn as part of an AI strategy designed to secure the Paris-based group’s long-term future in an advertising industry facing existential threats from new technology. 

Senior advertising executives have warned that generative artificial intelligence could challenge the position of the established advertising groups by making it easier for their clients to carry out their own marketing activities and allow tech companies to offer rival services.

Even without these external challenges, many expect the use of AI technology to lead to fewer jobs within the larger groups, as areas such as media planning and buying are automated and creative ideas can be carried out more quickly and cheaply. 

In a strategy update on Thursday, Publicis said that the plans would put AI technology at the “core” of its business.

The Paris group, which owns advertising and market agencies around the globe, said that its AI strategy would allow all 100,000 of its staff to use consumer data for 2.3bn profiles of people across the world, with “trillions of data points about content, media, and business performance”. 

Among its objectives, Publicis said that this would allow greater accuracy for media planning, buying and optimisation, as well as personalised advertising “at scale” for brands owned by its clients.

In results posted on Thursday, Publicis said that it increased organic net revenue 6.3 per cent last year, above the guidance range reported in October, with 5.7 per cent growth in the fourth quarter. 

The group generates about 60 per cent of revenue in the US, which grew 5 per cent last year, while its European operations grew 10.3 per cent in 2023.

Arthur Sadoun, chief executive, said that all staff would become data analysts, able to access information pulled from different parts of the group alongside AI tools to create marketing campaigns.

Sadoun said that its investment in AI would not lead to any job losses, although predicted that people would have “different jobs” in the future. “We can create jobs through our growth. AI is going to radically change how we operate.”

Publicis has already invested heavily in its data-led services, including through the acquisitions of digital groups Sapient in 2015 and Epsilon in 2019 to add to its technology platforms. In 2018, Publicis launched an AI tool for its staff to use, called Marcel.

The group said it will invest €100mn in 2024, half on training and recruitment of staff and the rest on technology, such as licences, IT software and cloud infrastructure. This will have no dilutive impact on its operating margin in 2024, it said, and is expected to be slightly accretive to margins in 2025.

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