Maurice Lévy
| Maurice Lévy | |
|---|---|
 | |
| Lévy in 2008. | |
| Born | February 18, 1942 (age 84) Oujda, French Morocco |
| Nationality | French |
| Citizenship | France |
| Education | École des Hautes Études Commerciales du Nord |
| Occupation | Advertising executive |
| Years active | 1971–present |
| Employer | Publicis Groupe |
| Company | Publicis Groupe |
| Organization | Publicis Groupe; Viva Technology |
| Title | Chairman of the supervisory board and former chief executive officer of Publicis Groupe |
| Term | 1987 – 1 June 2017 |
| Predecessor | Marcel Bleustein-Blanchet |
| Successor | Arthur Sadoun |
| Known for | Leading Publicis for thirty years and turning a French agency into a global communications group |
| Spouse | Married |
| Children | 3 |
Maurice Lévy (born 18 February 1942) is a French advertising executive who served as chief executive officer of Publicis Groupe from 1987 to 2017 and has since chaired its supervisory board. He was only the second person to lead the company since its founding in 1926, succeeding its founder Marcel Bleustein-Blanchet, and his thirty-year tenure is among the longest of any chief executive of a large European listed company.
Lévy joined Publicis in 1971 as director of information technology, an unlikely route to the leadership of an advertising agency. His reputation was made in September 1972, when fire destroyed the company's headquarters on the Champs-Élysées. Lévy went back into the burning building to recover the company's data and records, an act that Bleustein-Blanchet did not forget and that is generally cited as the origin of his rise.
He was appointed chief executive of Publicis Conseil, the group's founding agency, in 1981, became its chairman in 1984, and took charge of the whole group in 1987. Publicis was then a substantial French agency with limited international presence, in an industry consolidating rapidly around British and American holding companies.
Lévy's response was acquisition. Publicis bought Saatchi & Saatchi in 2000, Bcom3 in 2002, bringing Leo Burnett, Starcom and MediaVest, and then moved into digital far earlier than its competitors, buying Digitas in 2007, Performics, Razorfish in 2009, Rosetta, and Sapient in 2015 for about US$3.7 billion. By the end of his tenure Publicis was one of the largest communications groups in the world and derived a majority of its revenue from digital work, a proportion no competitor matched.
The most conspicuous failure of his tenure was the attempted merger with Omnicom, announced in July 2013 as a merger of equals that would have created the largest advertising group in the world. It collapsed in May 2014 over questions of governance, tax domicile and executive roles.
He created Viva Technology in 2016, a large annual technology conference in Paris, and Publicis90, a fund investing in ninety start-ups to mark the company's ninetieth anniversary. He handed the chief executive role to Arthur Sadoun on 1 June 2017.
Background: the advertising holding company
Consolidation
The industry Lévy inherited was in the middle of a structural change that determined everything he did.
Advertising had historically been a business of individual agencies serving clients in single markets. From the 1970s, as clients became multinational and demanded consistent campaigns across countries, agencies were rolled up into holding companies able to serve a client everywhere at once. The Saatchi brothers in London and Omnicom and Interpublic in New York led the process, and Martin Sorrell built WPP from a shopping-basket manufacturer into a holding company by acquisition through the 1980s.
The logic was scale in media buying, which is a volume business, and the ability to offer a global client a single point of contact. The consequence was that an agency which remained national, however good its creative work, would progressively lose multinational accounts.
Publicis in 1987 was a strong French agency in a world consolidating around English-speaking holding companies.
Conflict of interest
Holding companies exist partly to manage a constraint peculiar to the industry: an agency cannot work for two competing clients. A group solves this by owning several agency networks operated at arm's length from one another, so that one network can hold Coca-Cola and another Pepsi.
This is why the large groups are collections of named networks rather than single brands, and why acquisitions are rarely merged into the parent. Publicis retained Saatchi & Saatchi and Leo Burnett as distinct networks for precisely this reason.
The digital shift
The change that dominated the second half of Lévy's tenure was the movement of advertising from broadcast and print to digital media, and with it the movement of value from creative work toward data, technology and measurable performance.
Google and Facebook took a very large share of the resulting spending directly. The holding companies' response was to acquire digital and technology capability, and the question of the period was whether an advertising group could become a technology and consulting business before consulting firms such as Accenture and Deloitte became advertising businesses.
Lévy committed to that transition earlier and more expensively than his competitors.
Early life
Lévy was born on 18 February 1942 in Oujda, in French Morocco, into a Jewish family. The family moved to France, and his background in a Jewish community in North Africa during the Second World War is a subject he has referred to in later interviews.
He studied at the École des Hautes Études Commerciales du Nord and trained in information technology at a time when the field was new and had little status in commercial firms.
He worked in data processing before joining Publicis.
Career at Publicis
Joining, and the fire
Lévy joined Publicis in 1971 as director of information technology.
On 27 September 1972 a fire destroyed the Publicis building at 133 Champs-Élysées, which housed the agency's headquarters and the Drugstore Publicis. Lévy re-entered the building to retrieve the company's records and computer data.
The act became part of the company's institutional memory and brought him to the personal attention of Marcel Bleustein-Blanchet, the founder, who had established Publicis in 1926 at the age of twenty and had run it ever since. Lévy's advancement dates from that point.
Rise
Lévy was appointed chief executive of Publicis Conseil, the group's flagship and founding agency, in 1981, and became its chairman in 1984.
In 1987 he was appointed chief executive of Publicis Groupe, becoming only the second person to hold the position since 1926.
Early international expansion
Lévy's first attempt at international scale was an alliance with the American group Foote, Cone & Belding, formed in 1988, which gave each partner access to the other's markets.
The arrangement broke down acrimoniously in the mid-1990s and was resolved through litigation. The experience is generally credited with convincing Lévy that alliances were an inadequate substitute for ownership, and that Publicis would have to buy its international network outright.
The acquisitions
Publicis acquired Saatchi & Saatchi in 2000 for about US$1.9 billion, a transaction of considerable symbolic weight: the London agency that had defined the industry's aggressive expansion in the 1980s was bought by the French company it had once overshadowed.
Bcom3 followed in 2002, in a transaction valued at around US$3 billion, bringing Leo Burnett, the Starcom MediaVest media businesses and a relationship with the Japanese group Dentsu, which took a shareholding in Publicis.
These two purchases moved Publicis from fifth or sixth in the industry to third or fourth, and gave it the multi-network structure required to serve competing clients.
Digital
The more consequential sequence began in 2007 with the purchase of Digitas, an American digital marketing company, for about US$1.3 billion. Performics, Razorfish, acquired from Microsoft in 2009, and Rosetta followed.
The largest was Sapient, acquired in 2015 for about US$3.7 billion, which brought technology consulting and systems integration capability rather than advertising, and which was combined with Publicis's digital assets as Publicis.Sapient.
By the time Lévy left, digital accounted for a majority of Publicis Groupe revenue, a position none of the other large holding companies had reached. The strategy was expensive and was criticised by investors during the period when the acquisitions were being absorbed and organic growth lagged.
The Omnicom merger
In July 2013 Publicis and Omnicom announced a merger of equals that would have created the largest advertising group in the world, ahead of WPP, with combined revenues of around US$23 billion.
Lévy and Omnicom's John Wren were to serve as co-chief executives for an initial period. The announcement was made jointly on a rooftop in Paris and was presented as a response to the scale of Google and Facebook.
The transaction collapsed in May 2014. The stated obstacles were regulatory delay, the tax domicile of the combined entity, and unresolved questions about senior appointments including the chief financial officer. Reporting at the time attributed the failure principally to the difficulty of merging two organisations with different cultures under a shared leadership structure that neither side would concede.
The failure cost both companies a year of management attention and some client losses. Lévy said afterwards that the deal had foundered on details that should have been settled before it was announced.
Later initiatives and succession
To mark the company's ninetieth anniversary in 2016, Lévy launched Publicis90, a fund that invested in ninety start-ups, and Viva Technology, an annual Paris conference bringing together large corporations and start-ups, which became one of Europe's largest technology events.
He also imposed a widely noted internal change, suspending Publicis's participation in advertising award festivals including Cannes Lions for a year in 2017 and directing the money saved into building an artificial intelligence platform for the group, called Marcel after the founder. The decision was contentious within an industry for which awards are a principal currency.
Lévy handed the chief executive role to Arthur Sadoun on 1 June 2017 and became chairman of the supervisory board. He has described the transition as having worked well, and the orderly nature of it contrasted with succession difficulties at several competitors.
Compensation
Lévy's remuneration was the subject of sustained controversy in France.
A deferred compensation arrangement agreed in 2003, intended to vest on his departure and reported at around €16 million, attracted political and press criticism in a country where executive pay is a sensitive public question. He defended it on the ground that his total compensation over the period had been below that of comparable executives at competing groups and that the arrangement was the deferred portion of it.
The scheme was revised following shareholder and public pressure.
Public roles and views
Lévy has been a prominent public figure in French business, serving on various advisory bodies and speaking regularly on European competitiveness, technology and the relationship between large companies and start-ups, the theme of Viva Technology.
He has been an advisory board member of the Genesis Prize, and has been active in Jewish community organisations in France.
He was made a Commander of the Legion of Honour.
Management style
Accounts of Lévy's leadership emphasise three things.
The first is longevity used deliberately. Thirty years allowed him to pursue a transition, from French agency to global group to digital business, on a timescale that a chief executive with a five-year horizon could not have attempted, and he made the argument explicitly.
The second is a willingness to buy capability rather than build it. Publicis under Lévy acquired continuously, and the digital purchases in particular were made at prices that his own investors questioned at the time.
The third is personal involvement in client relationships. Lévy retained direct contact with the group's largest clients throughout his tenure, an unusual practice at the head of a company of that size and one he defended as the only way to know what was actually happening in the business.
Personal life
Lévy is married with three children and lives in Paris.
He is known for a formal manner, for working hours that colleagues described as relentless, and for a habit of personally answering correspondence. He has spoken about his North African Jewish upbringing and about the influence of Bleustein-Blanchet, who had built Publicis from nothing and who remained a presence in the company until his death in 1996.
Assessment
Lévy took a national agency in an industry consolidating around English-speaking holding companies and left a global group that had made the digital transition earlier than any of its competitors. Both halves of that are substantial.
The Saatchi and Bcom3 acquisitions gave Publicis the scale to compete; the Digitas, Razorfish and Sapient purchases gave it a revenue mix that WPP, Omnicom and Interpublic spent the following decade trying to reach. Publicis's relative performance after his departure, when the industry's digital reckoning arrived in earnest, is generally read as vindication of the spending he was criticised for.
The Omnicom failure is the clearest blemish. A merger of that size announced without agreement on tax domicile, governance or the finance function was, on any reading, announced prematurely, and Lévy has substantially conceded the point.
The compensation dispute is a French argument rather than a commercial one, but it occupied a great deal of public attention and is part of how he is remembered domestically.
See also
References