Publicis Groupe’s 2.7% organic revenue decline was below internal expectations, mainly due to cuts from a handful of U.S. clients in the traditional advertising space which had “a stronger impact than anticipated in July.”

Q3 net revenue totaled $2,838 million, with $414 million of that amount reflecting the acquisition of Epsilon which was completed earlier this year. 

The performance of media operations was softer than expected in Q3 2019, as FCA and GSK continued to ramp up as anticipated but did not fully compensate for the impact of the losses incurred since Q3 last year. 

“We could have chosen the easy route and taken advantage of the status quo to find small pockets of immediate growth. Instead, we are accepting this painful situation in the short-term, to be better prepared for the future,” Sadoun said. 

“We are without a doubt at the hardest part yet of our journey and as is the case with any major structural change, things always get worse before they get better,” he added. 

Publicis Sapient’s shift from digital marketing services to full business transformation in the U.S. was also a headwind, as “the digital business transformation growth in the U.S. was not strong enough to compensate for the decline in one-off and project-based revenues leading to a negative Q3,” the company’s results read. 

This article was first published in Campaign US.