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Publicis Groupe Breathes Sigh of Relief with Microsoft Deal - Broadcasting & Cable

Publicis Groupe Breathes Sigh of Relief with Microsoft Deal

Marketing company invested heavily in digital ads
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A month ago, Microsoft gave much of its North American
advertising account to Publicis Groupe, a marketing company based in Paris.
Their earlier heavy investment in digital advertising has paid off, The
New York Times reported.

Its efforts in the digital investment resulted in an 8%
increase in revenue and a 30% gain in earnings in 2010; other advertising
companies experienced similar growth in the past year, after a difficult 2009.

Publicis Groupe chief executive Maurice Levy was proven
right. "We looked at digital and we invested in digital early on," he said. "We
then decided that the shift would be huge, so we invested massively. It happens
that we were right."

Publicis-owned ZenithOptimedia, a media buying agency, foresees
more growth in overall ad spending by about 5% during the next three years. Levy
agrees with this prediction, adding that he expected digital ads to account for
a fifth of global spending within seven years.

"Advertising came out of the downturn much more strongly
than expected," he said. "Can it continue to grow? My contention is yes."

This is true with some other forms of advertisements,
like television, which has seen some growth in spending. However, not all
advertising media has seen the same growth, such as print ads. With the
emerging digital advertising market, not all companies are following Publicis
Groupe's lead with large deals. The Omnicom Group, the second-largest
advertising company, has not joined in after overspending on digital agencies. -- Lindsay Rubino

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