Interpublic navigates Covid quarter with organic growth down less than ten per cent (just)

Interpublic is doing better – or less badly – in Covid-19 than some of its peers, reporting Q2 revenue at $1.85bn, down 12.8% on 2019, and organic net revenue down 9.9%. This “beats” Publicis Groupe’s organic 13% fall and Omnicom’s surprisingly sharp 23%.

In the US organic revenue declined eight per cent, internationally 13.1%.

CEO Michael Roth (above) says: “Our second quarter, as expected, bears the imprint of the pandemic and its economic impact, and the most challenging global operating environment in memory.”

Indeed it is. Roth, who declined to forecast the year but said trading had improved in June, gave some interesting insights into how IPG and other companies like it might emerge from the crisis, specifically a hybrid office/work from home new reality which he saw continuing. Roth said: “Around 50% of our people in Asia are back in the office at least some of the time; 30-to-40% in Europe; around only 10% in the US and UK; and less than that in LatAm.”

The upside for big companies is that it gives them the opportunity to reduce property costs. Omnicom has already announced big reductions in its property portfolio. This presents a problem for WPP, which still to report. CEO Mark Read has been busily creating WPP campuses across the world, involving long leases among other things, but the “new reality” may mean that there won’t be so many people who want or need such housing.

So far the ad holding companies have emerged less badly from Covid than many expected. The next quarter (as ever) will be critical to see if normality is indeed returning.

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