Publicis boss on the spot at investor day

* Levy to talk strategy at investor day on Thursday

* Company has underperformed industry peers

* Failed merger brings back CEO succession issue

* Publicis Worldwide head Sadoun seen current favorite

* $3.7 bln Sapient (NasdaqGS: SAPE - news) acquisition gets mixed response

By Gwénaëlle Barzic

PARIS, Dec 3 (Reuters) - Eighteen months after celebrating a corporate marriage with U.S.-based Omnicom that was to dominate the world of advertising, Publicis (Paris: FR0000130577 - news) and its boss Maurice Levy are single again, and face some awkward questions.

Chairman and chief executive Levy on Thursday faces investors worried that clients are deserting the French group and disappointed by a performance that lags the sector. (http://bit.ly/1yeEhpJ)

The $35 billion Omnicom-Publicis pairing would have overtaken WPP (LSE: WPP.L - news) as the world's biggest advertising company. It fell apart over leadership conflicts and delays to tax and antitrust approvals.

Investors want to see the rebound Levy has promised.

"The only credible response will be a return to organic growth in 2015. That will need to be visible in the figures. The most important thing is to stem client losses, at Razorfish in particular," said Conor O'Shea of analyst Kepler Cheuvreux.

Razorfish is Publicis' digital advertising arm making ads targeted at the Internet, which is the industry's growth area.

But online giants like Google (Xetra: A0B7FY - news) are moving to cut agencies out and capture ad spending directly, hitting players like Razorfish, which has lost business from clients including Motorola and Blackberry (Swiss: BB.SW - news) .

Levy has blamed his company's problems in part on an over-enthusiastic focus on the merger, but Publicis' organic growth was just 1 percent in the third quarter of 2014, while ex-merger partner Omnicom managed 6.5 percent.

At the investor day on Thursday, investors expect an update on profitability targets set out in September and also on the company's performance in emerging markets.

They also want clarity on a cash handout they have been hoping for now that funds have been spent on U.S. digital specialist Sapient, which Levy bought last month for $3.7 billion in a bid to kickstart a recovery.

The deal has received a mixed response.

"We would have preferred Publicis resolve its operational difficulties first," said Exane BNP Paribas in a research note. For 72 year-old Levy, who has been at the helm for 30 years, the thorny subject of his succession was something the Omnicom deal was supposed to solve.

Arthur Sadoun, head of one of its main divisions Publicis Worldwide, is seen as the current favorite, but Levy - who is due to go in 2017 - has a reputation for outmanoeuvring rivals.

Chief operating officer Jean-Yves Naouri left in a September shake-up.

"Maurice Levy has been organising his non-succession for years," said one industry source. (Additional reporting by Leila Abboud; Writing by Andrew Callus; editing by Geert De Clercq)