Mr. Levy: Never, including when I was a student and teachers were explaining to me the crisis of 1929. What we are seeing today is something unbelievable. There are trillions of dollars that have evaporated. There are scandals that have reached unprecedented levels, banks are in a very difficult situation and the financial system is really damaged. It creates a situation of anxiety for the population of the world because we are facing the first economic crisis of the globalized world.

 

This is something that businesses hate because they can not forecast or plan for the future. The question marks are very big, and during these situations there are some hesitations, and that's why I forecast a relatively gloomy 2009 for the ad industry. I think the first half will be tougher than the second, and I don't believe the market will pick up before the second quarter of 2010.

 

Ad Age: Does all of that make you nervous?

Mr. Levy: It doesn't make me nervous; the reality is it excites me. Obviously we are not immune and we have a situation that can be impacted by the recession. But we have made some strategic decisions that have been positive. We have formidably renovated our offering in the advertising agencies and created VivaKi, which gives us a unique profile in the industry. We have a strong foothold in the emerging markets, and this gives us the ability to offset -- if not totally, at least largely -- the impact of the economic crisis.

 

Ad Age: What about the situation excites you exactly?

Mr. Levy: I'm excited because this is something that leads me to think about how we can make our organization more efficient, how we can reduce our costs to help our clients, take maximum advantage of our scale to make sure our clients are the winners, and to think about new organizations and new operations and new client wins. I love that.

 

Ad Age: But what about the downside, such as closing down Honeyshed and layoffs?

Mr. Levy: Closing down Honeyshed was something that made me sad. I had a formidable love for this operation, and I supported them during the whole process. The problem with Honeyshed was that we had not yet got the response of the advertisers, and in these times advertisers are not keen to try new things. Advertisers want to put money in well-tested operations. And further investment in Honeyshed, which I have supported from day one, would have still taken a lot of money and many years. And today I don't have the right to invest in this type of long-term operation that has some high risk, because to finance this kind of thing, I will have to cut jobs in other areas. I have to be fair to people creating value, and this is the kind of situation which is a dilemma for me. I have to weigh the rational and the emotional. On the emotional side, I want to stay. On rational, it takes a lot of time, has a risk necessitating at least as much money that we have already spent, and that makes the bet too high.

 

Ad Age: Do you foresee any layoffs in 2009?

Mr. Levy: I'm very cautious with layoffs. We will unfortunately have in some agencies the necessity of laying off people, and we will do it, obviously, if we have to.

 

Ad Age: Does that mean you have plans for laying people off?

Mr. Levy: On an agency-by-agency basis, we may find some specific situation where we may have to lay people off. At the same time we may have some situations where we have to hire people. What I do expect is that we are managing our head count in a way which is mainly based on natural attrition and turnover in order to avoid any kind of massive layoff.

I don't believe it is right for companies of our kind, which are based on the quality and motivation of the people, to consider that we should adjust our cost by laying off people. If I need to do it and if I have to do it, I will do it, but I prefer to anticipate to cut the cost rather than head count. This is a time when we need all of our people pumped and motivated and going after clients. It's not the time to think about layoffs.

 

Mr. Levy: We want to limit the use of freelancers and temps. And we want to slash our overhead by 10%.

 

Mr. Levy: Leo Burnett. Publicis France has been absolutely staggering, winning almost every account. And we have some very bright spots in Russia. Digital has been staggering, and Publicis Modem has been fantastic. Digitas has been absolutely formidable, and the creation of the VivaKi Nerve Center is something that is a formidable resource for the group.

 

Mr. Levy: The low point had been, during the first half of the year, our health-care operation, which has been stabilized in the second half, as expected, and is becoming a high point. The low point we have had is some small operations in the events field that have not performed exactly as we expected. We had a relatively good year, so it's difficult to find a real serious low point.