Interpublic’s balancing of traditional and digital pays off with strong organic growth

No wonder Interpublic CEO Michael Roth (below) is looking pleased. The McCann and FCB owner has posted organic revenue growth of 6.7 per cent in the first quarter of 2016 – 8.3 per cent in the US – ahead of rivals Omnicom (3.8 per cent) and Publicis Groupe (2.9 per cent). We’re still waiting for WPP’s numbers which are hard to compare as its measure of growth is net sales.

The figures are doubly good as IPG’s first quarter is traditionally its weakest. Revenue rose to $1.7bn while IPG turned a loss of $5.4m in the period last year into a profit of $1.8m. CEO Roth remains cautious, citing difficulties in markets such as Brazil and Russia, but the company’s heavyweight status in the US is proving a benefit. The US is the by far the world’s most thriving economy at the moment and IPG has done well in the recent round of media reviews, winning Coca-Cola in the US and Johnson & Johnson globally. Its media business outside the US remains a worry, with both UM and Initiative lagging their rivals in some markets, the UK in particular.

Roth still has work to do: IPG’s operating margin of 1.2 per cent still lags its peers but, after years of struggle, it’s finally heading in the right direction. Roth says: “Our goal is always to give the best offerings we have, not just one discipline. The health of a client relationship is that we’re bringing multiple services to the table.”

IPG’s creative advertising networks seem in good shape. McCann has settled down under Harris Diamond while Carter Murray has effected a near miraculous transformation at FCB (formerly draftFCB). R/GA has, arguably, overtaken WPP’s AKQA as the leader of the digital pack while the new MullenLowe creation has given the old Lowe network the scale it’s lacked in the US.

With some of the other networks you feel their relentless public focus on digital makes the ‘traditional’ ad networks look old hat. Under Roth IPG has been careful to keep the good of the old along with the promise of the new.

Back to top button