Publicis,
owner of the Saatchi & Saatchi and Leo Burnett ad agencies, has put
the brake on China and will adopt a "more selective approach" to taking
on assignments in the country.
Maurice Lévy, chief executive of the French marketing services group, told the Financial Times ($) that competition for Chinese clients was "frenzied" in the run-up to the 2008 Olympics.
Publicis has chosen to stand back from the fray and the reticence shows in its latest financial results.
Publicis revealed that Q3 revenues from Asia-Pacific grew just 3.1% compared with the 4.9% growth achieved in Europe, a relatively mature market.. For the nine months, performance in Asia-Pacific was ahead of Europe, so the underperformance seems temporary. Lévy says it is deliberate:
We will choose only the clients who pay our bills and will give us our margin."
China is littered with the wreckage of western companies which threw caution to the wind in the search for rapid growth. So, Publicis' professed caution is understandable.
However, it will be interesting to see how long Publicis feels it can keep applying the brake in China, as shareholders expect advertising companies to be big beneficiaries of China's current consumer boom.
Last week, rival WPP reported that Q3 revenues from emerging markets, which includes Asia Pacific, Latin American and Middle East, grew almost 16%.It didn't give a specific figure for China. More on WPP's China strategy in this EngagingChina story.
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