Interpublic’s organic growth went into reverse in Q1 2023, down 0.2% with revenue of $2.18bn, a 2.3% decrease on 2022. It’s worth emphasising that the ad holding companies measure organic growth in slightly different ways, important when the difference between the seemingly good and bad is so narrow.
CEO Philippe Krakowsky blamed technology client cutbacks (Microsoft is a biggie), a sector that suffered generally in the US late last year. The cutbacks likely prompted redundancies at IPG’s digital agencies, including R/GA.
Krakowsky (above) says: “In our first quarter, the services and capabilities that have led our substantial multi-year growth, notably media, healthcare and data-informed practices, continued to perform well, with strong growth that was offset by certain areas of softness, notably among marketers in the technology sector. The result was a slight decline in first quarter organic revenue.
“Financial results in the quarter are consistent with our internal forecast of pacing for the full year, both overall and across each of our operating segments. Since the start of the year, we have won a number of the industry’s most competitive account reviews, encompassing a diverse set of services and client sectors, which increasingly benefits our outlook as we move further into the year. During the quarter, we also demonstrated ongoing strong expense discipline.
“We continue to expect full-year organic growth at the midpoint of our range of 2% – 4%.”
The numbers from Publicis, Omnicom, WPP, Havas and now IPG suggest that Publicis is well ahead of the game with a growth rate of 7.1%. Omnicom is up 5.2%, WPP 2.9% (it says that if computed like Omnicom’s the figure would be 4.9%) and Havas, now part of Vivendi, 1.1%.
With an uncertain economic outlook (to put it mildly), cutting costs is likely to be as big a part of what they do in 2023 as fuelling growth – as IPG’s Krakowski acknowledges.