IPG posts revenue decline

29 October 2009

NEW YORK: Interpublic Group, the advertising agency holding company, reported an 18% decline in operating revenues, to $1.43 billion (€968m; £872m), in the third quarter of this year, as the economic downturn further impacted marketing budgets.

According to the New York-based firm, sales decreased by 14.2% on an organic basis in Q3, and are also down by 11.8% on this measure for 2009 as a whole, to $4.23bn overall.

Within this, like-for-like figures fell by 13.4%, to $964m, in the US, from July to September, with international totals off by 15.2%, including slides of 19.5% in the UK, 16.8% in Continental Europe, 9.7% in Asia Pacific and 9.3% in Latin America.

Each of these regions has also delivered a double-digit drop for the year to date, except Latin America, which has witnessed a more modest contraction of 1.7% in organic terms.

Net income reached just $17.2m in the third quarter, while IPG has posted a net loss of $35.8m over the last nine months, it said in a statement.

More specifically, revenues through its Integrated Agency Networks arm, which includes Draftfcb, Lowe, McCann Worldgroup and Mediabrands, have shrunk from $4.2bn to $3.6bn this year on an annual basis.

Furthermore, the conglomerate's Constituency Management Group, which is comprised of its specialist agencies, has also seen sales diminish from $831m to $671m within this timeframe.

Michael Roth, Interpublic's chairman/ceo, said "during the [last] quarter, the economic downturn continued to weigh on our results."

"Client sentiment has stabilised, but remains cautious, which makes it difficult to predict what growth will look like in 2010."

"As a result, we are aligning our cost base against conservative top line assumptions and are positioned to deliver significantly improved profitability next year."

Data sourced from Interpublic Group; additional content by Warc staff