paidContent.org - Publicis Continues To Bet On Internet Ad Spend, Despite The Risks

Looking back at the growing strains on the traditional ad business over the last year, Publicis Groupe CEO Maurice Lévy expresses his continued enthusiasm to the NYT that the rise of digital media will save the industry. Lévy, who spends most of the article professing his ardor for Barack Obama, says that despite the global economic downturn, online growth will remain solid. As he has maintained since last year, by 2010, Lévy expects 15 percent of global ad spend will be tied to the web. He has also previously said that 25 percent of Publicis' revenues would be related to the internet by next year, but the NYT interview didn't include an update on whether or not Lévy still holds that view.

?Risks to betting on internet ad spend: To be sure, banking on the growth of online as traditional ad spend was cutting back was a fairly safe one when Lévy first made it in May 2007, a Morgan Stanley report on Publicis says that the company might want to rethink its past bets internet gains. "This has recently become a higher-risk strategy," the Morgan Stanley report says, pointing to the last downturn, when online spending suffered the most. Still, the current signs suggest that even with the significant economic pitfalls, online appears fairly resilient, although that's mainly attributable to lower cost search ads.

?No major acquisitions: Lévy has indicated that he's altering the course Publicis has pursued over the past year, at least when it comes to its acquisition strategy. Speaking on CNBC (via WSJ) a few days ago, he said, the company, which helped kick off the M&A frenzy for interactive ad agencies when it paid $1.3 billion for Digitas in Dec. 2006, would not be making any big purchases in the next few months. That said, the company is still looking for bargains in emerging markets and is currently in talks with several unspecified companies.

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