Publicitas: from lighthouse to will-o'-the-wisp

Stunned, the Swiss media industry has been looking since December 2016 at its former beacon, which has turned into a will-o'-the-wisp within two and a half years. Publicitas and its parent PubliGroupe are the most dramatic examples of media change in Switzerland.

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In April 2014, publicly traded PubliGroupe, which as recently as the early 2000s had a war chest in the triple-digit millions, sold its main investment company, Publicitas, for a tip to German private equity-

company Aurelius. This company has now sold Publicitas again. The buyers in a management buyout were the former Global CEO of Publicitas, Jörg Nürnberg, and his Chief Financial Officer Carsten Brinkmeier, two personalities who were previously unknown in the Swiss media scene. At the moment, the two men are on a presentation tour of important Publicitas customers. They are meeting with both burning interest and lively distrust.

This has less to do with their personalities than with a third figure who, however, remains in the background. The industry service "Persönlich" asked Nürnberg on December 5: Who owns Publicitas now, and to what extent? Nürnberg's answer: "Three partners each have an equal share in Publicitas." Strangely enough, this "third man" has not been discussed further until now. Who is he? Why does he want to remain unidentified? Werbewoche asked Jörg Nürnberg. He was not prepared to give his name; he is a silent partner with no operational functions and does not come from the industry.

It is possible that the rapid management buyout was also due to stock market factors. Since the beginning of 2016, the Aurelius share has risen from 40 to 57.04 euros (Dec. 20, 2016). Several board members have sold their own shares worth millions. If the party is to continue, there is no need for loss positions on the balance sheet.

For two and a half years, Nürnberg's and Brinkmeier's predecessors tried everything to bring the once market-dominating advertising broker back into the black. But the loss of revenue as a result of sharply declining print sales and terminated management contracts always outweighed the newly generated income from digital business and the sometimes brutal savings. In addition, 2016 was significantly worse for print advertising than the average of the previous five years. This makes the P. model all the more interesting for small and medium-sized publishers, especially today, in order to survive on the advertising market against Admeira and Tamedia.

In the background is the old problem that agencies in particular pay too little for the services of Publicitas. Since the volume is decreasing dramatically, Publicitas can no longer cover its costs. In addition, regardless of market performance and the efficiency of the current organization, there are adverse trends, especially the one toward direct booking. This makes more work for the media agencies, but is rewarded by the media companies with special discounts.

In order to save costs, more and more administrative functions at Publicitas have been outsourced to Bratislava, where people work cheaper than in Zurich. Quality deficiencies, of which there is talk in this context, are not comprehensible to the new P. management. Marty's successor as CEO of Publicitas, Wolfgang Schickli, had a decidedly different opinion on this than the new owners. This is said to have been one of the main reasons why he resigned as CEO after only two months.

Unusual cost-cutting measures have created an unfavorable impression. For example, all 300 or so employees were asked whether they would be prepared to voluntarily reduce their workload. Since the alternative of layoffs was in the background, about half of the workforce reportedly said yes in principle. In the third week of Advent, the departure of two performance and know-how managers was announced.

carriers, the sales managers Res Spycher and Roger Mazenauer. Economic reasons" were explicitly given as the reason, which did not build trust.

On the surface, everyone is keeping a low profile; no one except Jörg Nürnberg wants to be quoted. Behind the scenes, however, people are speaking plainly. The head of a media agency bluntly advises the worried publishers who call him to manage accounts receivable hard, to collect outstanding invoices and, whenever possible, to deal directly with customers and agencies.

Meanwhile, there are always embarrassing moments of perplexity, such as on Friday, December 9, at the meeting of the Communications Council (formerly the umbrella organization for Swiss advertising). Under the chairmanship of Council of States member Filippo Lombardi, the members of the board and the representatives of the individual interest groups (clients, media providers, media and advertising agencies, etc.) were elected for the following year as usual. The then Publicitas CEO Wolfgang Schickli was scheduled for election. He came to the meeting, but had resigned the day before.

A participant with a great deal of experience comments: "This raised the question: Can we still trust Publicitas?" Good question, especially since it concerns a company that - along with Goldbach, Admeira and APG - adorns the homepage of the Ks-cs.ch website with its logo as a "Premium Partner. The new co-owner Jörg Nürnberg answers clearly: "The measures were and are necessary because we have to come down from the high cost level. No one has to worry about our financial strength. We have restructured our business considerably, so we expect to break even in 2017."

Stunned, the Swiss media industry has been looking since December 2016 at its former beacon, which has turned into a will-o'-the-wisp within two and a half years. Publicitas and its parent PubliGroupe are the most dramatic examples of media change in Switzerland.

Karl Lüönd is a freelance publicist and book author.

This article is from Werbewoche 1/2017, January 13, 2017.

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