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Interpublic cuts health networks from three to two as it chases higher margins

IPG-Interpublic-Group-of-Companies-Logo-300x153Interpublic is set on improving its profit margins to the same level as WPP and Publicis Groupe. It also has a gaggle of Elliott Management appointees sitting on its board (Elliott owns just under seven per cent of IPG) who are determined on improving the aforementioned margins – and, possibly, selling the company.

So more consolidation at IPG is on the cards and the world’s fourth-biggest marcoms company is cutting its number of health marketing networks from three to two, which means that FCB and McCann will still have one but Lowe won’t.

Lowe’s ICC network is being rolled into FCB Health, which bought the UK’s Halesway agency last year in its first deal outside the US.

As well as tidying up IPG’s health portfolio – to a degree – the move may also testify to the pressure healthcare marketers are under from regulators who some aspects of healthcare marketing as, frankly, dodgy; involving, as they do, doctors being paid or otherwise persuaded to prescribe certain drugs. This has stemmed the growth of what was once one of the most profitable niches in advertising.

IPG is likely to make further moves this year to tidy up its empire. There’s no clear sigh yet that rivals WPP and Omnicom are likely to follow IPG’s example but Publicis Groupe, currently digesting $3.7bn acquisition Sapeint, is in the process of folding its gaggle of expensively-acquired digital agencies into Publicis Sapient.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.
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