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Publicis expects World Cup boost in strong 2014

Friday, 3 Jan 2014 | 2:09 AM ET
Soccer World Cup to drive advertising market in 2014: Publicis CEO
Friday, 3 Jan 2014 | 1:30 AM ET
Maurice Levy, CEO of Publicis, says better GDP forecasts and the winter Olympics will help the advertising market in 2014, but the FIFA World Cup will be the real driver.

Advertising industry growth in 2014 will be boosted by an improved global economy and the soccer World Cup, the chief executive of French advertising company Publicis told CNBC, but some countries offer better prospects for the industry than others.

"There are three elements which will drive the [advertising] market up," Maurice Levy told CNBC. "The first one is the forecasts for gross domestic product (GDP) and GDP growth is expected to be better than 2013, the second is the FIFA World Cup and the third one is the Winter Olympic Games [in Sochi]."

Speaking to CNBC in Paris where the advertising and public relations company is based, Levy said the World Cup was "driving a lot of sponsorship and activity."

(Read more: This region is the world's fastest growing advertising market)

"If you convert the media expenditure into agency revenue it is above 3 percent and we expect that Publicis will be probably ahead of the market. We have some very good winds, we have a good business pipeline and we expect 2014 to be better than 2013."

Despite weak advertising spending in China weighing on third quarter earnings, Publicis achieved $3.4 billion of net new business in the first nine months of 2013. Furthermore, in July, Publicis and U.S. rival Omnicom announced they were to merge to create the world's largest advertising group worth $35.1 billion.

Presented as a "merger of equals" by the companies involved, the transaction -- which is expected to close in the first quarter of 2014 if the European Commission approves the deal – means they will overtake rival ad agency WPP in size.

(Read more: Omnicom, Publicis to merge to create ad giant)

Despite the deal, Levy said the company faced some headwinds as it approached the end of its financial year. It will report fourth quarter earnings in February.

"When it comes to Publicis, the first nine months of 2013 were excellent and we are in line and slightly ahead of our objectives. [But] the last quarter is always one of uncertainty and, this year, I must say that I feel some softness," he said, attributing this to clients delaying investments or launches in order to deliver better earnings.

He said that macro-economic environment presented a "contrasted picture" for the industry and that while the U.S. had a "very good profile," emerging economies were shakier.

"There are some issues regarding the BRIC market as it seems slower than we are used to but China is picking up progressively. There are still some issues regarding Brazil and India so it is something that is still quite complicated," he said, adding that Africa and the Gulf states were doing "extremely well" despite being smaller markets.

Europe, meanwhile, was "not yet taking off" and Publicis "did not expect Europe to reach the average of industry or GDP growth," Levy said.

- By CNBC's Holly Ellyatt, follow her on Twitter @HollyEllyatt. Follow us on Twitter: @CNBCWorld

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