Well, that wasn’t so surprising, was it?

30th January 2017

I’m talking about yesterday’s announcement that Arthur Sadoun is to succeed Maurice Lévy as chairman and chief executive of Publicis Groupe.

While speculation as to who would succeed the charismatic and energetic Lévy has been going on for years, Sadoun has been the bookies’ favourite for the last couple of years, so his elevation to the top spot of the world’s third biggest marcomms holding company will come as no surprise, even if the timing of the announcement was sudden and somewhat unexpected.

There have been other candidates of course. Jean-Yves Naouri was anointed as heir apparent at the turn of the decade, but was dropped in September 2014 after several years of testing him in new posts (Naoui left the Groupe and is now chief executive of JYN Consulting in Paris).

Sadoun, who currently serves as chief executive of Publicis Communications, will take on the new position as of 1 June this year. Once in post, he will also oversee the management board, which consists of group chief financial officer Jean- Michel Etienne; secretary general Anne-Gabrielle Heilbronner; and new member Steve King, who serves as chief executive of Publicis Media.

As we were researching this piece, I was rather surprised to learn that Sadoun is only the third chief executive of Publicis in 90 years, which is both a testament to the company’s stability; and also Lévy’s tenacity – the 74-year-old been at Publicis for more than 45 years, and has led it for almost 30.

The US trade paper Ad Age put it rather well: “For both his predecessors [Marcel Bleustein-Blanchet founded the Paris agency in 1926], running Publicis was more of a lifelong mission than a job.”

Lévy’s sense of mission was summed up in a statement he made to the media yesterday. Bleustein-Blanchet, he said, “entrusted me with the keys to the future of Publicis in 1987”. He will have chosen his successor as carefully as his predecessor did.

However, the decision may not have been Lévy’s alone.

“Succession is never an easy task and this is the reason why I very much insisted that Maurice Levy remain at our side to provide Arthur Sadoun with guidance in and recommendations for this difficult task,” said Elisabeth Badinter in the company’s statement yesterday.

Badinter is Bleustein-Blanchet’s daughter and the head of both the company’s supervisory board and the nominating committee that chose Lévy’s successor. “I have proposed that Maurice Levy join the supervisory board as chairman.”

Shareholders will vote on Badinter’s recommendation, but Publicis-watchers say that they are “very unlikely” to disagree with it. What this means, of course, is that although Lévy is stepping down, he won’t be leaving – indeed he will continue in a powerful and influential Publicis Groupe role.

After the “Naoui experiment”, Publicis’ focus turned to Sadoun, now 45, who was added to the senior management board in 2014. He had earlier been promoted to CEO of Publicis Worldwide from running Publicis, one of France’s largest agencies, and the network in Western Europe.

Sadoun’s rapid career progression (he only joined the network in 2006) received another boost following the ill-fated mega-merger with the US-based Omnicom Group (which was called off in May 2014). Lévy, perhaps stung by the failure of the deal that would have been the crowning glory of his career, embarked on a major reorganisation of the holding company at the end of 2015, placing Sadoun in charge of the new Publicis Communications division, comprising all the group’s creative agency networks.

He appears to have done a good job – Ad Age named him executive of the year in 2016 and, under his leadership, the network has won some very big pitches Stateside, including Miller-Coors and Walmart. He has also attempted to bring back an entrepreneurial spirit to Publicis. It’s too early to tell whether this has worked, but he certainly has his predecessor’s energy and drive, and he is said to understand the creative process, and the needs of creative (as well as the importance of digital), better than others in his elevated position.

He also, so it is said, has a great dislike of “siloed thinking” and empire building – he has followed Lévy’s “power of one” philosophy, drawing the best talent from around the Groupe to pitch for, and work on, accounts; which may explain those aforementioned big account wins.

It’s unlikely that anyone within the sprawling Publicis empire who’s expecting an easy ride under the new regime will last long. Levy described his successor thus: “He has the intelligence, the energy, and the passion necessary to master our trade in a connected world that is changing and evolving constantly. He’s also a man with admirable human qualities. A man whose impatience is common knowledge but also a token of his demanding nature.”

So, it appears that, as something of a Lévy protégé, sharing his old boss’s business philosophy, and with aforesaid boss on hand to offer guidance if need be, little will change at Publicis. That will probably please the shareholders – investors like continuity and stability.

But in the longer term, Sadoun will have to address structural challenges within the marcomms industry. Lévy’s biggest coup was the $3.7bn acquisition of SapientNitro in 2015. It is unlikely that Sadoun will be able to conclude a deal like that himself, because there are no more agencies of that size left to acquire. A “PubliCom”-style merger is also unlikely. Growth will have to be steady and organic, rather than spectacular.

Further growth in digital is essential, but here Publicis (as well as Omnicom, WPP, IPG and other big groups) will have to face the challenge of non-traditional rivals such as Amazon, Facebook, Apple and Google. As advertising becomes ever more digital, automated buying and placement poses a very real threat to the traditional media agencies within the Groupe.

And then there is the increasing incursion of the big consulting firms onto the marcomms turf – most recently Accenture’s acquisition of one of the last remaining indies of scale, Karmarama, last November.

Finally, there is the commodification of many marketing services; Sadoun will have to find a way of adding value to clients, and margins to his business, as prices are driven ever-lower by demanding customers.

But these are problems for another day. For the moment, Sadoun can bask in the glory of reaching the summit, while Lévy may allow himself some satisfaction that what might have been a difficult transition has, thus far at least, proceeded without incident.

He may also be able to summon a wry smile that yesterday’s announcement will put his greatest rival, WPP boss Sir Martin Sorrell, under the spotlight. Sorrell turns 72 next month, and although he shows no signs of slowing down, he won’t be able to carry on forever. Worryingly for shareholders, he shows no sign of choosing a successor either – and there are no obvious candidate(s) as there was at Publicis. Added to all that, WPP is very much a company built in its founder’s image; Sorrell is, in many ways, completely irreplaceable.

Omnicom’s John Wren is 64 and IPG’s Michael Roth is 70, so these groups won’t escape the succession problem for too much longer either. Interesting times ahead, and not just for Publicis, either…