America’s Interpublic did slightly better than expected in Q1 2024: total revenue, which includes billable expenses, was $2.50bn against $2.52bn in Q1 2023; net revenue was $2.18bn, an increase of 0.3% from 2023 leading to an organic increase of 1.3%. Operating income was $184.2 million compared to $188.3 million in 2023.
US-based rival Omnicom reported 4% organic growth in Q1, Publicis Groupe 5.3%. WPP reports later this week.
CEO Philippe Krakowsky (left) says: “The first quarter results we are reporting today represent a solid start to the year, and are consistent with our 2024 targets. Our data and tech driven media offerings, healthcare marketing, and PR capabilities continued to perform strongly, driving our growth. Marketer sentiment has begun to improve relative to the back half of last year, and the new business pipeline is more active.
“We continue to enhance our offerings, further embedding precision and performance into our integrated, full-funnel media solutions, including our suite of Unified Retail Media services, which deliver cross-platform planning and optimization for a range of clients. We are also progressing in the integration of technologies such as Generative AI into the core of our marketing services capabilities, notably through our recently-announced partnership with Adobe, which speeds content ideation, creation, production and activation.
“At this point, with our smallest seasonal quarter complete, we continue to expect to achieve full-year organic growth of 1-2%, although a recent decision by a significant ongoing client (most likely Pfizer) which will adversely impact the balance of this year and likely make achieving the top end of that target more challenging.”
Ad holding companies may be delivering a patchy performance these days but one thing they are good at is forecasting, just as well as none of them (including Publicis) are growing particularly fast and small percentage increases have become important to investors.
Largely via media, they still dominate the agency side of adland which means that good independents still end up selling to them which creates quite a constipated eco-system. The alternative is investment from private equity which, all too often, means being batted around like a shuttlecock from one PE company to the next.
WPP will be closely watched. If it misses its somewhat modest 0.9% target in Q1 there may be trouble for CEO Mark Read.
