The Region That Grew Fastest and Kept the Least

When Publicis Groupe closed its books on 2025, one region stood out. Net revenue in the Middle East and Africa reached €440 million, up 10.8% on an organic basis. The group as a whole grew 5.6%. Only Latin America grew faster.

Six months earlier, the same company had published a less celebrated table. It listed operating margins by geography for the first half of 2025. North America earned 17.5%. Asia Pacific earned 26%. The Middle East and Africa earned 1.0%.

The two numbers belong to the same business. One says the region was among the group's best performers. The other says it was, at least for that half-year, its least profitable. That gap is worth investigating, because it points to something larger than one company's accounts. It suggests that the growth of global agencies in Arabia may be driven less by advertising, in the familiar sense, than by the region's appetite for transformation. And transformation budgets behave differently when the world turns uncertain.

A small line with a long history

It helps to start with scale. In 2025, the Middle East and Africa represented about 3% of Publicis Groupe's net revenue. North America alone accounted for more than €8.9 billion. By the standards of a group with over 100,000 employees, the region is a modest entry.

Its roots, however, run deep. Much of what Publicis owns in the region did not begin as Publicis. Raja Trad joined Leo Burnett Middle East as an account director in 1981 and became its regional chief executive a decade later. Leo Burnett came into Publicis through the acquisition of the American holding company Bcom3, completed in 2002. Trad came with it. Maurice Lévy, who led Publicis at the time, later described him as one of the most valuable assets that deal delivered.

Trad went on to run the group's creative agencies in the region from 2016. In 2018 he became the first executive chairman of Publicis Groupe Middle East, a role created under the group's new country model. That model placed one leader over every Publicis business in a market: creative, media, PR, data and consulting. The idea, known internally as the Power of One, was that clients should buy from a single integrated group rather than a collection of competing agency brands.

The man who now runs that structure also arrived in 2002. Bassel Kakish started his career in audit and advisory work before joining Publicis. He served as the region's chief financial officer, then chief integration officer, then co-managing director of Publicis Sapient in the Middle East. He became chief executive for the Middle East and Turkey in April 2021, responsible at the time for more than 2,100 people. Forbes Middle East put the figure at over 3,600 by 2025.

That leadership history matters for a simple reason. For more than four decades, the region was run by people whose careers were built inside it. The regional organisation was led first by a creative agency veteran and then by a finance and integration specialist. The second appointment fit the model the group was building, one in which the hardest problem was no longer making ads but assembling media, data and technology into a single offer.

Where the growth came from

Publicis does not publish a detailed breakdown of its regional business. Its quarterly statements do, however, name the drivers. Through 2024 and 2025, the explanations repeated. In the second and third quarters of 2024, the Middle East and Africa grew on double-digit growth in media and at Publicis Sapient, the group's technology and consulting arm. In the first quarter of 2025, the region grew 11.5% organically, again led by media and technology.

The media side has its own scoreboard. According to the 2025 COMvergence Global New Business Barometer, Publicis Media Middle East ranked first in the GCC for total new business. Spark Foundry, one of its agencies, ranked first among agency networks in the region.

The detail behind that ranking deserves attention. COMvergence's total new business figure includes accounts an agency successfully defended. When retentions are excluded, the order changes. WPP Media MENA ranked first in net new wins in the GCC, with Publicis second. Publicis's regional strength in 2025, in other words, rested heavily on keeping the clients it already had, alongside winning new ones. That is a different kind of strength. It speaks to relationships and incumbency as much as to momentum in pitches.

The technology side is where the story becomes more distinctive. Publicis Sapient sells digital business transformation: rebuilding how organisations operate and serve customers. Few advertising groups carry such a business in the region. Trad himself told an interviewer that Publicis would be alone in offering digital business transformation in the Middle East. In a market where governments and state-linked companies were redesigning services at speed, that capability had obvious demand.

It is reasonable to read the region's growth as partly a function of that demand. This is an interpretation. Publicis has not published how much of its regional revenue comes from government or government-linked clients, and the Middle East and Africa line also includes Africa. But the pattern in the group's own explanations is consistent: when the region grew fastest, technology and media were named as the reasons.

Why growth did not become margin

The margin figure is harder to explain, and Publicis has not explained it publicly. Several hypotheses are plausible, and none can be confirmed from public data.

The first is investment ahead of demand. A workforce that grew from roughly 2,100 to more than 3,600 in four years carries real costs, especially when much of the hiring is for senior technology, data and consulting talent that the region competes for globally.

The second is the nature of transformation work itself. Consulting projects are labour-intensive. They often involve long delivery cycles and large teams. Their economics differ from media buying, which can scale with technology once the infrastructure is in place.

The third is an accounting detail that came to light in October 2026. On the group's third-quarter call, Publicis explained that much of Publicis Sapient's Middle East revenue is actually reported in the United Kingdom, because Sapient's UK operation delivers significant work to clients located in the Middle East. Earlier in the year, chief executive Arthur Sadoun had said roughly 10% of Sapient's revenue was exposed to the region, through both its local operations and its UK business.

This has a meaningful implication. The Middle East and Africa line in Publicis's accounts does not capture the full value of the region to the group. Some of the region's demand shows up in London. If the most profitable parts of that work are booked outside the region while local costs stay inside it, the regional margin could understate the region's contribution. Publicis has not said this is the case. But it means readers should treat the 1.0% figure as a measure of a reporting segment, not a complete verdict on the business.

The year the pattern was tested

In 2026, the region's growth story met an external shock. The US-Iran conflict and disruption around the Strait of Hormuz hit Gulf economies and client confidence. In the second quarter of 2026, Publicis's Middle East and Africa net revenue fell 8.3% organically. The company attributed the decline directly to the conflict in the region. For the first half, the region was down 6.8%, and its operating margin turned negative at minus 9.9%. The rest of the group, meanwhile, kept growing and raised its full-year guidance.

The third quarter, reported on 13 October 2026, showed improvement but not recovery. Net revenue in the region fell 1.4% organically. Over nine months, it was down 5.0%. Asked about the outlook, chief financial officer Loris Nold was direct: "We are not planning for the Middle East to do better so far."

Publicis was not alone. Across the Gulf, agencies reported steep revenue declines as hotel and aviation clients cut spending, and some cut salaries and jobs, according to AGBI. In June, WARC estimated that under a severe scenario, GCC ad spend could contract slightly in 2026, against a baseline expectation of growth near 12%.

What is distinctive in Publicis's case is the mechanism its leaders described. Sadoun said the conflict was having an indirect effect by pushing clients to delay large transformation projects even further. The same capability that had set Publicis apart in the region, the ability to sell enterprise transformation, was the one most exposed when clients chose to wait. Transformation spending is discretionary, large and easy to postpone. A brand can pause a campaign for a quarter. A ministry or a company can defer a multi-year technology programme for a year.

What the numbers reveal

It would be easy to read Publicis's Middle East story as a simple boom and setback. The more useful reading is structural.

The group's regional growth in 2024 and 2025 appears to have been concentrated in the businesses most tied to large, investment-led budgets: media scale and digital transformation. That concentration helped Publicis outgrow its peers in the region. It also tied the region's performance to the investment cycle of its clients rather than to the steadier rhythm of consumer advertising. When that cycle slowed, the region turned from the group's second-fastest grower into one of its few declining markets within two quarters.

Two caveats keep this from becoming a neat theory. First, the 2026 decline came from an external conflict, not from any failure of the model, and a different shock might have hit a different business line. Second, the regional segment understates the region's real weight inside Publicis, because some of its demand is served and booked elsewhere. Any judgement based on the regional line alone is working with partial information.

What remains is a clearer picture of what global agencies are actually selling in Arabia. For much of the past decade, the most valuable thing a group like Publicis could offer the region was not a better advertisement. It was the capacity to help organisations rebuild themselves. That demand created the growth. It also defined the risk. The agencies that expand fastest in this market may be those most exposed to the pace of its transformation, and that pace is set by forces no agency controls.