UPDATE 1-France's Publicis responds to ad market upheaval with push into consulting

* CEO presents his first 3-year strategic plan

* Targets 4 pct organic sales growth in 2020

* Aims to boost margins through cost cuts, acquisitions

* Shares down after early jump(Adds share reaction, background, analyst quote)

By Mathieu Rosemain and Gwénaëlle Barzic

LONDON, March 20 (Reuters) - France's Publicis isresponding to upheaval in the advertising market with astepped-up drive to become a consulting partner to globaladvertisers online, banking on the new strategy to reversesluggish growth and boost profits.

The world's third-biggest advertising group said it istargeting underlying sales growth of 4 percent in 2020, up from0.8 percent last year, by focusing on its digital armPublicis.Sapient and fostering greater collaboration between itsmany agencies.

The target is part of a three-year strategic plan unveiledby Chief Executive Arthur Sadoun in London on Tuesday in a keytest since he succeeded company veteran Maurice Levy.

Advertising giants are being forced to rethink their modelsas Google, Facebook and consultants Accentureencroach on their turf and big consumer goods groupssuch as Unilever cut ad spending.

Publicis and larger rivals WPP and Omnicomhave underperformed benchmark stock indexes over the last year,as investors penalised disappointing results and weak forecasts.

WPP, whose shares slumped on March 1 when it reported itsworst annual sales performance in 2017 since the financialcrisis, expects flat growth this year.

Publicis said it aimed to grow earnings per share (EPS) by 5to 10 percent annually between 2018 and 2020.

The group is targeting an operating margin rate of a maximumof 17 percent in 2020, up from 15.5 percent last year.

Publicis expects to increase earnings through a 450 millioneuro ($550 million) cost saving plan and targeted acquisitionstotalling between 300 and 500 million euros a year between 2018and 2020.

"The challenge is to justify how we can progress like thiswhile maintaining growth," Sadoun said in a call with reporterslate on Monday.

After an initial jump, Publicis shares were down by about0.4 percent by 1230 GMT as investors gave a lukewarm response toits new strategy.

"The key question is whether investors will believe thesetargets, especially as they are largely based on M&A," saidJulien Roch, an analyst at Barclays.

"WPP also has a 5-10 percent annual EPS growth target andinvestors currently do not believe this target, in our view."

Both WPP and Publicis appointed single global managers fortheir biggest clients to provide all the services required bythese companies rather than through multiple agencies.

Publicis aims to differentiate itself further by offeringtechnological tools, such as platforms and data analysis, tobetter reach the end-customers.

Reports that Cambridge Analytica, a political consultancyhired by Donald Trump, improperly accessed information about 50million Facebook users is seen by some analysts as positive forPublicis, as big brands may consider traditional ad groups asbetter managers of their brand image.

The challenge for Publicis remains to prove that Sapient,which weighed heavily in a 1.4 billion-euro writedown in 2016,is well integrated into the company and will improve results,analysts have said.($1 = 0.8103 euros)($1 = 0.8139 euros)(Reporting by Mathieu Rosemain and Gwenaelle BarzicEditing by Shri Navaratnam and Adrian Croft)