1. Particular sensitivity to the economic conditions
The advertising and communication sectors are particularly sensitive to changes in the budget of advertisers, whose activity may be affected by recessionary periods in certain countries or business sectors, due to macroeconomic factors such as inflation, rate increases or the resurgence of Covid-19. Although periods of slowdown are increasingly perceived by clients as opportunities to grow their market shares through appropriate communication or in-depth changes, an unfavorable economic environment could lead to a reduction in their advertising budgets and transformation and therefore have an adverse impact on the Groupe.
In addition, the Groupe's cost structure largely consists of employee compensation. As a result, macroeconomic factors such as high inflation over a long period could have an adverse impact on the margin, an impact that the Groupe has so far managed through the implementation of efficiency measures through its platform organization.
2. Highly competitive industry
The advertising, communication and consulting industries are highly competitive and are expected to remain so. In addition, in a volatile economic environment, there is greater pressure from clients on their costs, adding to competitive pressure.
The Groupe's competitors are of all sizes and types, and range from large multinational companies, including Internet giants capturing an ever-increasing share of the advertising market, to smaller agencies that operate in niches or regional markets. Many players, including systems integrators, database design and management specialists, telemarketing and web-based companies, now have access to technical solutions that respond to the Groupe's clients or prospects' specific marketing and communication needs.
The Groupe competes with these companies and agencies to both maintain existing client relationships and to win new clients and accounts. Growing competition could have a negative impact on the Groupe's revenue and earnings.
3. Agility of the advertising and communication industry
Changes to regulations and market practices on the management of personal data may disrupt the advertising Industry, in particular on data processing and analysis. The development of programmatic digital media buying, the possible internalization of some activities as well as the expansion of the Internet giants could lead to the capture of the Groupe's activities by other players. Finally, the disruption to some of the Groupe's major clients impacts their needs and therefore the services that the Groupe provides to them. If the Groupe is unable to offer these clients the best possible service within adequate time frames and at scale, its financial position and results could be affected.