Publicis invests €300 million in AI to reshape advertising and predict impact

Publicis Groupe, the world’s largest advertising group in terms of market value, said on Thursday it plans to invest 300 million euros ($326.94 million) in artificial intelligence (AI) over the next three years. This investment is part of the Paris-based group’s strategy to establish itself as “the industry’s first AI-powered intelligent system.”

The investment also underscores Publicis’ strategic vision to fortify its position in an advertising landscape besieged by the relentless march of new technologies. In recent months, senior advertising executives have raised concerns about the potential impact of generative artificial intelligence, which could empower clients to handle their own marketing activities and enable tech companies to offer competing services, challenging the established advertising groups.

In response to the evolving landscape of the advertising industry and the challenges posed by new technologies, Publicis outlined its AI strategy to ensure its long-term sustainability. The company revealed that half of the 2024 investment will be directed towards upskilling, training, and recruitment, while the other half will be allocated to technology, licenses, software, and cloud infrastructure.

During a film presentation preceding its annual results publication in February, Publicis Groupe emphasized its commitment to invest 100 million euros in AI in 2024 alone. Importantly, the funding for this investment will be derived from “internal efficiencies,” with no dilutive impact on the operating margin.

The group also unveiled its strategic plan to place AI technology at the core of its business, aiming to integrate AI further into its current platform model. This involves connecting every individual in the company to an entity named “CoreAI,” which the group began engineering in the second half of 2023, with plans for implementation starting in the first half of 2024.

Publicis Groupe, with a global presence and ownership of advertising and market agencies, outlined its vision for AI to empower all 100,000 staff members to leverage consumer data from 2.3 billion profiles worldwide, incorporating “trillions of data points” related to content, media, and business performance.

Among the anticipated benefits, the group highlighted the potential for greater accuracy in media planning, buying, and optimization, as well as the ability to deliver personalized advertising at scale for its clients’ brands. CEO Arthur Sadoun emphasized that all staff members would become proficient data analysts, utilizing information from different parts of the group alongside AI tools to craft effective marketing campaigns.

In its presentation, Publicis Groupe reported organic growth of 6.3% in 2023, surpassing the previously shared guidance range of 5.5% to 6% in October.

CEO Arthur Sadoun, addressing the early figure in a press conference, emphasized the importance of showcasing the company’s financial strength as a starting point for its strategic journey. Sadoun highlighted that CoreAI is built on the data acquired and developed over the past decade.

Meanwhile, Publicis also acknowledged the likelihood of AI technology leading to job reductions within larger groups, as automation becomes prevalent in areas like media planning and buying, facilitating quicker and more cost-effective execution of creative ideas.

Responding to inquiries about prospective acquisitions, Sadoun stated that their transformation phase is complete, and the focus will now shift to smaller investments in technology, intellectual property, and talent.

“Our transformation is behind us”, adding that the group will now focus on lesser investments in tech, IP, and talent,” Sadoun said.