Publicis to expand presence in Sri Lanka

Although relatively unknown in Sri Lanka, the world’s third largest advertising holding company, the Publicis Groupe, has a formidable presence worldwide and is represented in Sri Lanka by one of its main global subsidiaries, Leo Burnett.

With Sri Lanka showing potential for high growth in the years to come, the second-in-command of the French multinational advertising and communications company Bertrand Siguier was in Colombo earlier this week in order to get more involved with the Sri Lankan market.

Speaking to the Daily FT, he shared his views on the potential in Sri Lanka, Publicis’s strategies in emerging markets and the group’s performances in different regions. Following are excerpts from the interview:

By Cassandra Mascarenhas

Q: Could you briefly give me an overview about Publicis and its presence in Sri Lanka?

A: Publicis in this country is not known or at least is not known as Publicis because it does not have an agency in this country but Publicis as a holding company has an agency in this country that is called Leo Burnett. So to make it simple, the Publicis Group has under it three brands – Leo Burnett, Saatchi & Saatchi and Publicis, and this applies worldwide. It is sometimes a bit confusing that Publicis is the name of the holding and at the same time, the name of a group of agencies.

Sri Lanka is a market in which we are represented by Leo Burnett and this is all right because such a market is still at the moment rather small and I don’t think we need to have three Publicis brands in the country. I think that we can, for the moment, use Leo Burnett as a launch pad for us. We haven’t been present as such in Sri Lanka but I am happy to be here and Publicis needs to be known as a group, which is the third largest worldwide communication group, and also as a participant in the advertising market in Sri Lanka.

Q: What has brought you to Sri Lanka?

A: Simply because one of our strategies is to get more and more involved in the so-called emerging markets. I would not call them emerging markets anymore because I think they have emerged, so I would say high growth markets. Among these, you have the BRIC – Brazil, Russia, India and China. I would put Sri Lanka in this category because although Sri Lanka is a small market at the moment, it is a high growth market.

You will see that happening; you have already seen that happening over the last few years and you will see it happening more and more over the next few years. So even if it is a small market, it will be part of the ‘small tigers’. We used to talk about the Asian tigers at one point which included Taiwan and Korea and I think among the smaller tigers, you have Sri Lanka.

People probably don’t know about Sri Lanka but after coming here and looking over the figures, I am absolutely clear that Sri Lanka will also experience a strong growth in our business and this is why we should be present and be known.

Since I am in India fairly often, I will come back in order to make sure that we are known for exactly what we are because we believe in this country, we have already invested a bit in this country and will continue to do so. There is no better tribute to the importance of Sri Lanka in our market. But this is also due to the fact that the market here is not mature and therefore will experience high growth. We are focusing on Brazil, Russia, India and China and apart from Sri Lanka, will be looking at Mexico, Indonesia, South Africa and Turkey.

Q: What are your plans for Sri Lanka in order to make the most of this growth trajectory?

A: Our plan is to help the agency develop along with our clients. Whether that will lead to more investments in capital and so on, it’s too early to say. I am also here to make sure that our clients are well dealt with through our agency. I experienced that yesterday – for instance, when I met the Nestle Managing Director, he expressed satisfaction which for a service man like me, is nice to hear because we hear a lot of criticism which is normal in an agency which is not perfect. If you think you are perfect, you are finished.

This is really why I am here – for client purposes and because I want this country to know that we recognise its importance in our business, more in the future than in the past.

How that will turn out in terms of capital share is irrelevant at this point. We are not a financial business, we are a business which deals with clients, so I’m interested in making sure that we are present in a high growth market and that we can deliver proper and good services to our clients. We have a lot of global clients here but what I like in the agency is that we have a nice mix of global and local clients.

I don’t want to have an agency which is exclusively local because that would mean that our global clients – Nestle, Procter & Gamble, Toyota and so on – may feel strange in an agency but I also don’t want to have a multinational agency only because I don’t want the local clients to feel that this is not an agency for us because they don’t know this country well enough.

Q: How do you strategies differ in high growth markets and mature markets?

A: In emerging markets, we tend to make sure that we take advantage of the growth. We invest more and make acquisitions; we don’t want to be left behind and we try to have as much organic growth that is to take advantage of the growth. If the growth of a market in a country is between six to seven per cent, I would expect a good agency to make at least 10 per cent.

This is why we like high growth markets, not just in order to follow the growth but also to take advantage of the growth so we make all sorts of investments, make some acquisitions in some areas because it helps accelerate growth and acquire agencies in fields where we don’t have one, to complement the existing ones.

Apart from that, we follow the good old-school method of making new clients. Be good, talented and win new clients. And in a market that develops rapidly, when you take new clients, you grow more than the market. Not everyone has realised the potential that Sri Lanka has and I feel that the potential of this country is very real. It’s small but small and profitable is better than big and loss making.

Q: Speaking of loss-making, how has Publicis fared with the current situation in Europe and the US?

A:Europe at the moment comes at the end. First of all, we should mention the BRIC countries in which we are present and are taking advantage of and our growth is between seven and 12 per cent in such markets. Secondly, we have the US market. We are a French-based company but we are not a Franco-French company and the US being 50 per cent of the worldwide market, makes up a lot of our revenues and the US has done relatively well, with a growth of four to five per cent so I would count that on the positive side.

Thirdly, you have the digital activities that developed extremely fast in our turnover and consist of 33 per cent of our turnover, starting from zero 15 years ago. This shows the extent of the development of these activities.

On the minus side, Europe is slow. Europe is shy, afraid and has a lot of problems so our growth in the region, while it is difficult to generalise, will probably be around two to three per cent which is not really a percentage that is exciting and does not encourage us to invest, be dynamic, take risks and so on. These are mature markets but as a mature market, the US is doing better. When will real growth in Europe come back? Honestly I don’t know. French business for us today represents eight per cent; 92 per cent of our business comes from outside France.

Q: Looking at global trends, what do you see emerging in the field of advertising?

A: I think the trends we are going to see are the trends that we are already seeing. We are seeing the importance of digitalisation. It has happened, and very fast and it will continue to go up in terms of our turnover. I’m looking at the top 15 emerging markets – I see that trend continuing.

Take Sri Lanka, which is definitely among the high growth markets, the growth you should experience if everything goes right will last for a number of years if managed well because it’s starting from a low base so one would say that starting from a low base makes it easier to achieve high growth.