"We are winning today, thanks to AI!" How Publicis Sapient got itself to the right place at the right time for clients to catch-up

If there is one thing I would like you to take away [it] is that we are winning today, thanks to AI!

So says Arthur Sadoun, CEO of French advertising and marketing powerhouse, Publicis Groupe, parent to digital consulting company, Publicis Sapient. Clients include Walmart, T-Mobile and Marriott, with the Sapient arm today contributing 15% of total group revenues.

According to Sadoun, Publicis made its first bets on AI a long time ago, investing over €12 billion in data and technology over the past decade:

It's a journey we started more than 10 years ago under the vision of Maurice [Levy, Chairman of the Board], which [said], ‘If we want to win in the future, we need technology and data.’..The reason why we are winning today and the reason why we believe we are a category of one is that we made the investment in data and technology that allow us to leverage AI and create a massive competitive advantage at the moment.

The claim made by Sadoun is that Publicis Sapient is now in the right place at the right time, ready for its current and prospective client base to catch up:

Although clients are yet to embark in their large-scale AI transformation programs, we are seeing growing engagement on AI consulting projects for them to build their own agentic network. Marketing budgets remain firm with no material cuts taking place.

That said:

[Clients] are currently facing a marketing landscape that is more fragmented and complex than ever, where tech giants are spending billions on new AI technologies and infrastructure, multiplying the number of platform and channels and making it harder to reach and engage with audiences.

As a result, none of our top clients allocate more than four percent of their total marketing spend to a single platform. In fact, across our top 20 clients, the average spend on their largest platform is just two percent. In this context, our role as a trusted neutral partner able to deliver consistent cross-platform messages, optimize their budget and maximize return on investment with full transparency has never been more important. It allows us to carve out a white space for ourselves by serving as the connective tissue for our clients' technology, data and agent, creating the AI-powered marketing solution that they really need to win in the future.

There is a budgetary warning note to be struck against that backdrop:

You need to know that AI has a cost. This is one of the big reasons our clients today are being cautious on spending is that you can make all the plan you want. If you really want to implement AI, it has a big cost in terms of CapEx and also in terms of OpEx.

Commitments

But there has been acceleration in client demand when it comes to AI-powered products and services, particularly in three areas, he says:

First, in connecting media, which is booming at high single-digit growth, thanks to our ability to connect paid media with commerce and influencer through AI.

Second, in our AI production platform, which is growing double digits on the strength of demand for personalized content.

Third, in building agentic networks for clients who can no longer afford to a fragmented agent strategy and need to break down the silo within their own organization.

While clients may not have made the big commitments to date on AI, there is tangible interest out there, argues Sadoun:

I think the reason why things are changing now is that after a couple of years experimenting with AI, clients are realizing that they need to put AI at the core of what they do and that they need to do it in a way that can deliver today material business impact. This is what we are doing with them, and this is why, by the way, we see such a boom, particularly in Connected Media and particularly in the US where our model is the most advanced.

In terms of Connected Media, the big selling point here is AI’s ability to connect paid media with commerce and influencers, he argues:

To give you a concrete example, we are able today to spot someone to make sure that we advertise on the right influencer and leading directly to commerce to a new retailer website. I don't want to give any number here, but as you can imagine, this is the kind of thing that we could not do before because, again, you need AI to connect those capabilities.

Never forget that AI is only data talking to data. And our ability to truly understand people better than anyone else with Epsilon [its PeopleCloud platform that includes capabilities such as data, identity resolution, customer data platforms, clean rooms, digital media, retail media, site personalization, direct mail, loyalty, email marketing and measurement], to link it to the biggest influencer network and then link it to sales directly, is the kind of thing where AI is immediately leveraging capabilities that will drive business outcome.

AI is also speeding up content creation and production, although Sadoun adds:

The question is how AI allow you to measure performance of this content and make sure that you can correct or eliminate or accelerate depending on the business outcome. Again, for this, you need the data, which we have with Epsilon, and you need the AI to connect it to the capabilities.

Here come the agents

The firm is also placing a big bet on the success of agentic AI. Again, it’s early days in terms of client take-up, but  the direction of travel is clear, argues Sadoun:

What we have experienced with agents in the last year is clients trying to put agents almost everywhere and trying to see how it could work in a very fragmented way. What they realize now is that they need to connect all of these agents. And again, here, thanks to Sapient, we have a fantastic solution, which is really an agentic network called Bodhi that allow us to truly help our clients transform and bring all of those agents together powered by data.

Publicis is also ‘eating its own dogfood’ when it comes to AI, concludes Sadoun:

We are looking at every opportunity to automate labor-intensive task, thanks to AI. This includes implementing agentic solution at the core of our operations. In fact, we have started with our back-office processes. Combining our unique platform organization, our shared services backbone and the deployment of agents, we will bring greater elasticity to our cost base. Although it is early days, we are confident that this agentic solution will help us generate margin improvement beyond 2025, while allowing us to invest, including in training and up-skilling of our talent to be AI-fluent. Today, while many are asking how AI will impact our industry, we have already embedded it into all of our operations, making our revenue mix AI-enabled and perfectly adapted to our client needs. 

My take

It has been suggested by many commentators that AI would have a negative impact on the ad and marketing sectors. It’s currently blamed by many for the low valuation of the industry as a whole. Sadoun is having none of it, declaring:

Since the emergence of gen AI three years ago, a lot has been said about its impact on our industry. When it comes to Publicis, let's be clear, today, we are winning, thanks to AI. We don't want to talk about the promise of AI...AI is real at Publicis today, and it is the reason why we are growing now.