Publicis steps up investment in web content

Publicis, the marketing services group, has stepped up investment in creating internet content as it nears completion of its $1.3bn takeover of Digitas, the US-listed specialist in interactive and healthcare marketing.

Paris-based Publicis estimates that the Digitas deal will make it the biggest group customer of Google, Yahoo and MSN, the three leading sellers of advertising in the web search market.

But the group believes it must be a more prominent web content provider to avoid its agencies losing influence with clients and branding campaigns becoming less effective in digital media, where consumers can easily ignore, edit or comment on advertising.

It plans to launch its own web portals and increase the internet content capabilities of its advertising agencies, which include Saatchi & Saatchi and Leo Burnett.

Two portal projects – one in the US spearheaded by Dave Droga, a leading US advertising creative, and one in France – are due to be launched in March or April.

By itself, acquiring Digitas will increase the percentage of total Publicis revenues derived from digital and interactive to 15 per cent.

Staff from Digitas are already working for some existing Publicis clients, such as General Motors, and on joint pitches for new ones. But like its industry peers, Publicis faces a potential loss of revenue if advertisers shift mainstream budgets to the internet.

The web is dominated by low-cost, classified-style search advertising and not the brand building campaigns made, at some expense, by large agencies.

In an FT interview, Maurice Lévy, chief executive of Publicis Groupe, said search advertising could produce valuable results for brands but would not reproduce the “halo effect” they got by effective advertising on press or television.

Mr Lévy said: “Due to the sheer number of people going through Google or Yahoo every day, they are having to take an almost mathematical approach to advertising. That is great for them, but what you lose is the human touch.”

He said agencies could supply this by producing “creative” websites for brands that would draw consumers, but also offer the advertisers a more protective environment than the web in general.

It remains to be seen whether Publicis can boost margins on digital campaigns, which have tended to be smaller in budget and less profitable for agencies than press and television.