The global advertising industry is being reinvented by the economic downturn and migration to the digital world, according to Maurice Levy, Chief Executive Officer, Publicis Group.
“The landscape is becoming more fragmented and it is harder to attract the interest of consumers,” said Levy in an interview in Cannes.
“And then you have search engines that can deliver more results than a formidable campaign.”
Levy, CEO of the world’s fourth-largest advertising company, was speaking after a seminar he hosted at the 56th Cannes Lions Advertising Festival.
Attendance at this year’s event, the industry’s largest annual gathering, was down 40 per cent and the number of entries for ad awards fell 20 per cent, said organisers.
“We are facing one of the most important changes in the industry,” said Levy, adding that he does not expect the ad industry to post growth until the second half of next year.
The second quarter in 2009 was “very difficult and worse than expected” for the industry, he said.
“The bottom will be reached in July or August,” he said. Levy does not expect positive growth until the second half of 2010, with a rise of 1.5 per cent to two per cent.
A hiring freeze at Publicis’ agencies, which includes Leo Burnett and Saatchi and Saatchi, will remain and the company will selectively hire and grant salary increases, said Levy.
At the same event, Microsoft said it has teamed up with Publicis to jointly create programmes and technologies that help bolster internet advertising sales.
The “broad strategic agreement”, will centre on “key components of the digital marketing and advertising industry”, the two companies said in an e-mailed statement. The partnership includes the “creation, production and distribution of programming”.
Microsoft Corporation will work with Publicis’ internet and video production studio PBJS and Publicis clients will have first access to the programmes, said the companies.
The two will work together on technologies and methodologies that help to measure the effectiveness of online advertising.
Microsoft and Paris-based Publicis are trying to increase advertising sales on the internet, where marketers forecast higher spending compared with traditional media such as newspaper and magazines.
Redmond-based Microsoft in May launched its Bing search website to break Google’s dominance in internet search market and advertising.
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