Madison Avenue has a new power player: Arthur Sadoun.
Mr. Sadoun was installed earlier this month as the new chief executive of advertising giant Publicis Groupe SA. The 46-year-old is only the third chief executive to lead the storied ad conglomerate in its 91-year history.
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Known for his client-handling skills, Mr. Sadoun has big shoes to fill. He takes over from Maurice Lévy, the widely respected ad chief who led the Paris-based firm for almost 30 years and was named chairman of the supervisory board. Mr. Lévy transformed Publicis into the third-largest ad holding company in the world, with EUR9.73 billion ($11 billion) in revenue last year and 80,000 employees crafting marketing for brands such as Nestlé SA, Samsung Electronics Co. and Citigroup Inc.
Mr. Sadoun is charged with navigating the company through the most turbulent time in marketing. Technology now enables consumers to more easily avoid ads, the dominance of Facebook Inc. and Alphabet Inc.'s Google continues to grow, and the trust between agencies and marketers in the $529 billion global ad business has been damaged by a report that was released last year that said the U.S. ad industry is full of nontransparent business practices.
Mr. Sadoun will need to help the company get back on track after losing significant assignments from a rash of companies such as Procter & Gamble Co. Its bold acquisition of Sapient has also failed to live up to expectations.
The Wall Street Journal caught up with the newly installed ad czar to discuss the brewing tensions between advertisers and tech giants, the challenges ad companies face, and how rising populism is affecting marketing.
WSJ: What is the biggest threat to ad companies?
Mr. Sadoun: If the industry does not bring back growth to our clients' business, we will be in danger. We have to overcome the fragmentation that now makes marketing splintered. We must be delivering expertise in technology and data and think very broadly about creativity.
WSJ: Have Google and Facebook done enough to calm the concerns marketers have about brand safety and measurement?
Mr. Sadoun: We've been pleased to see Google and Facebook's recent efforts in this area. But there is a lot more they will need to do. Clients are worried by the lack of transparency on how and where their marketing messages are distributed and/or seen, how the algorithms work and the 'just trust us' approach. Today, leveraging data is key to marketing, but the limited amount of data clients get back about their [marketing] programs and the lack of a true ability to work across platforms, like they can do on the open internet, is a problem. It's the clients' money and data after all. We need a lot more access.
WSJ: Publicis recently wrote down the value of Sapient, a digital-technology company. What's been the biggest challenge?
Mr. Sadoun: The premium we paid for Sapient was not completely justified due to slower growth than we had anticipated. So we reflected this slower growth by taking this noncash charge. The struggles for growth, partly, came from us underestimating how difficult it is to get technologists and marketing working together. They are different cultures. We have been winning business and seeing momentum globally.
WSJ: There is a real lack of trust between agencies and marketers following the Association of National Advertisers' probe that discovered a lack of transparency in the way agencies conduct business. How can ad companies repair the relationships?
Mr. Sadoun: At Publicis, we believe any areas of conflict of interest must be eliminated right away and clients should never feel that there is any part of the process that they do not have transparency into. While we have passed all the audits to date, we remain committed to reaffirming a trusted and principled relationship.
WSJ: There has been a huge rise in populism around the world. What does that mean for marketers?
Mr. Sadoun: We have to acknowledge that there is almost everywhere in the world a middle class that is really in pain. This is something that we need to take into account at the political level, but also in the way we communicate. It has never been so important to make sure that whatever you do, you make people understand what you bring into their day-to-day life. This is what we are trying to do with our clients. A brand that is strong is a brand that is playing a concrete role in people's life.
WSJ: Where will ad companies be in five years?
Mr. Sadoun: The one prediction I will make is that there is likely to be more changes in our industry in the next five years than in the past 20.
Write to Suzanne Vranica at firstname.lastname@example.org
(END) Dow Jones Newswires
June 18, 2017 05:44 ET (09:44 GMT)