agency Publicis holds on to key Samsung contract: source
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[October 02, 2014]
PARIS (Reuters) - Ad agency Publicis
has kept hold of a major contract with Samsung Electronics, a person
familiar with the matter said, calming worries it would lose a client
analysts estimated brought it some 70 million euros ($88 million) last
"Publicis is the big winner. It has kept the budgets it had
earlier with Samsung and added additional business," said the
person, who declined to be named because the contract was
South Korea's Samsung, which put its advertising accounts under
review in May, spends heavily on marketing to keep consumers'
attention riven to its smartphones and televisions that compete
globally with products made by Apple and Google.
It spent more than $11 billion on advertising and marketing last
year, according to its annual report.
Publicis shares were up 1.7 percent at 0727 GMT on Thursday, while
stock in rival WPP, which was also in the running for parts of the
Samsung business, was down 0.8 percent.
Publicis-owned Starcom will buy advertising space for Samsung, Leo
Burnett will handle the creation of ads, digital agency Rosetta will
handle on-line marketing, and DBH will handle additional functions.
Interpublic Group and MDC Holdings, which currently handle some
parts of Samsung's U.S. advertising, will continue in their current
roles, according to trade publication Ad Age.
Charles Bedouelle, an analyst at Exane BNP Paribas, said the Samsung
contract was a "symbolic win" for Publicis after 15 tough months in
which its much-vaunted merger with U.S. competitor Omnicom fell
apart and its top-line growth has lagged rivals.
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"Given the unusual high level of confidentiality around the
contract, it is hard to gauge the impact," Bedouelle wrote in a note
"Whereas many were expecting a full or partial loss of (a contract)
that is 1-1.5 percent of revenues, we would guess Publicis has added
maybe 0.25 to 0.5 percent of revenues."
Publicis earned 6.95 billion euros in revenue in 2013.
(1 US dollar = 0.7922 euro)
(Reporting by Gwenaelle Barzic and Leila Abboud; Editing by
Jean-Michel Belot and James Regan)
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