Publicis raises growth target as AI-driven marketing demand stays strong

By Leo Marchandon

July 16 (Reuters) - Publicis raised its 2026 growth target on Thursday after second-quarter sales beat expectations, as demand for AI-powered marketing services and a strong run of client wins helped the ad giant absorb a sector-wide weakness in technology consulting.

Its marketing services, which account for 87% of net revenue, grew 6.5% organically in the quarter, more than offsetting a mid-single-digit decline in technology consulting.

The Paris-based firm now expects organic net revenue growth this year of 4.5% to 5%, lifting the bottom end of its previous 4% to 5% range. It also raised its free cash flow forecast to about 2.2 billion euros ($2.54 billion). Second-quarter organic net revenue rose 4.8%.

While rivals are cutting costs or navigating merger disruption, Publicis has used its mix of media creation, data analytics, and technology services to capture client demand for AI-driven marketing, even as large IT transformation projects are being delayed across the industry.

"All opex continues to be spent," Sadoun told reporters. "On the other hand, what we were already seeing in capex, large transformation spending that had already slowed because the context was not good, has only been accentuated."

Growth was led by Publicis' two biggest regions, with the United States up 5.5% organically in the quarter and Europe up 5.0%. Asia Pacific rose 2.6%, helped by 7.5% growth in China, while Latin America grew 11.0%. Middle East and Africa fell 8.3% due to conflict in the region.

After spending more than $3 billion on acquisitions this year, Publicis now plans to focus on integrating those assets rather than pursuing further large deals.

(Reporting by Leo Marchandon in Gdansk; Editing by Matt Scuffham)