Interpublic (IPG), owner of McCann, FCB, UM and Initiative plus a newish collection of data businesses, delivered solid Q1 numbers, the first under New CEO Philippe Krakwosky.
First quarter net revenue was $2.03 billion (up 2.8% on 2020) with net income (profit) of $91.7 million, which shows how agency margins are being squeezed even at successful operations. Organic revenue growth was 1.9%, behind WPP (3.1%) and Publicis (2.8%.) IPG is forecasting between five and six per cent for the year.
New CEOs usually start modestly, hopping to show improvement over the their reign. Krakwoski is more confident in the above forecast than either WPP’s Mark Read or Publicis’ Arthur Sadoun.
By region the US slowed (more or less level after a strong pre-pandemic Q1 202), with the UK up 3.5% and continental Europe a rather startling 12.4%. Outside the US IPG grew by 6.7%. Headcount fell 7.6%, several thousand people but not as bad as it might have been.
Krakowsky (above) says: “The return to organic revenue growth is a sign that our clients have begun to pivot to an investment mindset as they look to build their brands and grow their businesses in line with a broader economic recovery.”
Pundits, assisted by some high profile defectors to new-wave ad companies, have been consigning the ad holding companies to history for some time now but, so far, it hasn’t happened despite the pandemic’s best efforts. Their big media agencies still seem to be bringing home the bacon despite the tidal wave of digital money straight into the so-called walled gardens of Facebook, Google and, increasingly, Amazon. Walmart is a growing force in the US.
IPG and WPP’s share prices were both up around 4% today.