 "Martin Sorrell is spending a lot of time speaking about Publicis: Maurice Levy")
The head of the world's third-ranked marketing communications group, Publicis, is never short of words when speaking about his passion: advertising. Making a trip to India six months after announcing his group's mega merger with rival Omnicom, 71-year-old Maurice Levy highlights what the consolidation of the two giants will mean for the global advertising industry. He also emphasizes his group's commitment towards India, a market he says is key. Edited Excerpts:
How important is India for Publicis? Where does it stand in your pecking order of markets?
When you start ranking a country by importance you begin to make a few people in the organisation feel that they are less important. It is a strategic market. It is a market where we want to invest and we are investing. It is a market where we believe has a huge potential. If you look at the forecast of the World Bank, it says that the largest middle-class population in the world before 2030 will be in India, surpassing China. This is a market where we can still invest reasonably and we can grow our position. It is a market where there is knowledge in terms of digital and I see this area growing very fast everywhere. India is a strategic market for us. It is not the only strategic market, but one that is important for us.
How will the merger pan out in India and will you look to appoint an India head for the merged entity?
That is a possibility we could consider. But I haven't discussed this with my friend John Wren because the merger is not complete at this stage. Till the merger doesn’t happen, we remain competitors. We are yet to sit down and I see how the merger will pan out across markets. And this is true for all regions and markets including India. We have, however, organised 70 work streams, to see how we can improve and what are the decisions we need to take prior to the merger and what are the decisions we have to make day one after the merger and the decisions we will have to make after that. The decision pertaining to media will be taken after the merger is completed. It is not something that we can comment on now because we are still competing entities at this stage.
When is the merger expected to be completed given that you have approvals to get in three markets?
We expect the EU Commission to give its authorisation soon. In China, we expect it by mid of January and in Colombia, by the end of January. There are still more authorisations to be got from the US Securities and Exchange Commission as well as regulators in France and the Netherlands. Clearance from Dutch regulators will be needed since the merged company will be headquartered there. This is taking time. But by the second quarter of 2014, the merger will happen.
What are the revenues coming from digital and emerging markets, your two pillars of growth?
We began investing in digital when many hadn't recovered from the dotcom boom of the late nineties and early part of this century. Our investments began way back in 2002 and we continue to invest in this segment. A large part of our agency revenues come out of digital. To give you an example of the size and scale of our operations, in 2011, when I visited India, we had 100 people working in digital. Now we have 1,500 people working in digital in India. We are extremely solid on digital. We are well advanced in terms of position and innovation in digital. As far as emerging markets go, we have been faster in some countries as opposed to others. We have been much faster in Brazil. We have invested much faster in China. We have doubled the size of our operation as expected in China and we are doubling the size of our operation in India by end of 2014. The total share of revenues coming from emerging markets is roughly 25 per cent. Our ambition for the group is to bring it to 35 per cent by 2017. With the merged entity, we are doubling the size of our emerging markets operation due to the fact that Omnicom and us have approximately the same amount of revenue coming from these countries. So we straightaway double the size of our operation in emerging markets as a result of the merger. Our intention is to continue investing in these markets including countries such as Turkey, Indonesia and Mexico. These markets will become some of the biggest markets in our industry and we need to invest and be prepared for them.
Besides digital and emerging markets are there any other areas you consider key. How would you rate your performance here in India so far?
In India we need to strengthen our operation. We have some good business units here. We are extremely pleased with our agencies including flagship Publicis, Leo Burnett, Saatchi & Saatchi, Starcom, ZenithOptimedia, Digitas, Razorfish and MSL. All these agencies are moving in same direction and we are investing in these operations. We continue to invest wisely to strengthen the base of our operations here.
But have you achieved your objective of being a strong number two in India?
There are areas where we can improve ourselves, where we could have done better. We want to strengthen our position here. We can do better with organic growth. We still have to do some acquisitions, limited acquisitions in a few areas. But we have to do it.
How did the meeting with Sam (Balsara) go? Are you looking at a possible acquisition of Madison?
I am not commenting on this meeting. We have no conversation with Sam currently. I have great respect for Sam and what he has achieved. But there are absolutely no plans currently with Madison.
Martin Sorrell has been having a field day since you announced your company's merger with Omnicom. What is the one thing you would want to tell him?
The interesting bit is that Martin Sorrell is spending a lot of time speaking about Publicis, about our merger with Omnicom. This has always been part of his job. The day he will not speak about all these things, he will think that he has lost 20-30 per cent of his job. I prefer to comment about the group I lead and the merger I am trying to bring about with John Wren. We are working very hard and it is leaving very little time to think about competition and to worry about what Martin Sorrell says. I understand that some people are obsessed with what competition is doing. I am obsessed with what I can do for my client.
But do you see further consolidation happening in the industry following the Publicis-Omnicom merger?
I will not comment on what they (WPP) will be doing. But consolidation is something that will happen and I guess it is not at its end.
Even as you strive to come together, how are you merging the two work cultures that prevail in the two companies?
This is a very real problem. And I will not deny that we have our differences. We are coming from different cultures. We have, however, handled cultural differences in the past. When Publicis acquired Saatchi & Saatchi, it was a sea-change for us. It was a new world, and imagine, we were simply crossing the (English) Channel. But that channel was as wide as the Pacific Ocean. When we acquired BCOM3 (parent of Leo Burnett), it was the same, very different cultures. We like diversity. We have to accept the difference in cultures and deal with it positively.
How important is India for Publicis? Where does it stand in your pecking order of markets?
When you start ranking a country by importance you begin to make a few people in the organisation feel that they are less important. It is a strategic market. It is a market where we want to invest and we are investing. It is a market where we believe has a huge potential. If you look at the forecast of the World Bank, it says that the largest middle-class population in the world before 2030 will be in India, surpassing China. This is a market where we can still invest reasonably and we can grow our position. It is a market where there is knowledge in terms of digital and I see this area growing very fast everywhere. India is a strategic market for us. It is not the only strategic market, but one that is important for us.
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That is a possibility we could consider. But I haven't discussed this with my friend John Wren because the merger is not complete at this stage. Till the merger doesn’t happen, we remain competitors. We are yet to sit down and I see how the merger will pan out across markets. And this is true for all regions and markets including India. We have, however, organised 70 work streams, to see how we can improve and what are the decisions we need to take prior to the merger and what are the decisions we have to make day one after the merger and the decisions we will have to make after that. The decision pertaining to media will be taken after the merger is completed. It is not something that we can comment on now because we are still competing entities at this stage.
When is the merger expected to be completed given that you have approvals to get in three markets?
We expect the EU Commission to give its authorisation soon. In China, we expect it by mid of January and in Colombia, by the end of January. There are still more authorisations to be got from the US Securities and Exchange Commission as well as regulators in France and the Netherlands. Clearance from Dutch regulators will be needed since the merged company will be headquartered there. This is taking time. But by the second quarter of 2014, the merger will happen.
What are the revenues coming from digital and emerging markets, your two pillars of growth?
We began investing in digital when many hadn't recovered from the dotcom boom of the late nineties and early part of this century. Our investments began way back in 2002 and we continue to invest in this segment. A large part of our agency revenues come out of digital. To give you an example of the size and scale of our operations, in 2011, when I visited India, we had 100 people working in digital. Now we have 1,500 people working in digital in India. We are extremely solid on digital. We are well advanced in terms of position and innovation in digital. As far as emerging markets go, we have been faster in some countries as opposed to others. We have been much faster in Brazil. We have invested much faster in China. We have doubled the size of our operation as expected in China and we are doubling the size of our operation in India by end of 2014. The total share of revenues coming from emerging markets is roughly 25 per cent. Our ambition for the group is to bring it to 35 per cent by 2017. With the merged entity, we are doubling the size of our emerging markets operation due to the fact that Omnicom and us have approximately the same amount of revenue coming from these countries. So we straightaway double the size of our operation in emerging markets as a result of the merger. Our intention is to continue investing in these markets including countries such as Turkey, Indonesia and Mexico. These markets will become some of the biggest markets in our industry and we need to invest and be prepared for them.
Besides digital and emerging markets are there any other areas you consider key. How would you rate your performance here in India so far?
In India we need to strengthen our operation. We have some good business units here. We are extremely pleased with our agencies including flagship Publicis, Leo Burnett, Saatchi & Saatchi, Starcom, ZenithOptimedia, Digitas, Razorfish and MSL. All these agencies are moving in same direction and we are investing in these operations. We continue to invest wisely to strengthen the base of our operations here.
But have you achieved your objective of being a strong number two in India?
There are areas where we can improve ourselves, where we could have done better. We want to strengthen our position here. We can do better with organic growth. We still have to do some acquisitions, limited acquisitions in a few areas. But we have to do it.
How did the meeting with Sam (Balsara) go? Are you looking at a possible acquisition of Madison?
I am not commenting on this meeting. We have no conversation with Sam currently. I have great respect for Sam and what he has achieved. But there are absolutely no plans currently with Madison.
Martin Sorrell has been having a field day since you announced your company's merger with Omnicom. What is the one thing you would want to tell him?
The interesting bit is that Martin Sorrell is spending a lot of time speaking about Publicis, about our merger with Omnicom. This has always been part of his job. The day he will not speak about all these things, he will think that he has lost 20-30 per cent of his job. I prefer to comment about the group I lead and the merger I am trying to bring about with John Wren. We are working very hard and it is leaving very little time to think about competition and to worry about what Martin Sorrell says. I understand that some people are obsessed with what competition is doing. I am obsessed with what I can do for my client.
But do you see further consolidation happening in the industry following the Publicis-Omnicom merger?
I will not comment on what they (WPP) will be doing. But consolidation is something that will happen and I guess it is not at its end.
Even as you strive to come together, how are you merging the two work cultures that prevail in the two companies?
This is a very real problem. And I will not deny that we have our differences. We are coming from different cultures. We have, however, handled cultural differences in the past. When Publicis acquired Saatchi & Saatchi, it was a sea-change for us. It was a new world, and imagine, we were simply crossing the (English) Channel. But that channel was as wide as the Pacific Ocean. When we acquired BCOM3 (parent of Leo Burnett), it was the same, very different cultures. We like diversity. We have to accept the difference in cultures and deal with it positively.