The World According to Roth: IPG Boss Bends Peers' Ears

15 June 2006

Michael I Roth, chairman/ceo of the planet's third largest agency holding company Interpublic Group, on Tuesday shared his philosophy of life, the universe and advertising with fellow members at the American Advertising Federation's annual convention in San Francisco.

Roth, an accountant by profession, told over 700 attendees he doesn't view IPG as a brand. "We are not a brand. We don't pretend to be a brand, and frankly we shouldn't be a brand," he said.

Instead, he takes the view that the job a of a holding company is that of facilitation, policy-making, providing resources, improving collaboration and financially supporting its brands - its component agencies, in other words.

Roth acknowledged that the spirit of evolution is abroad: "The world is changing. We have to evolve with that," he said. However, he noted that, for some clients, change is a one-way street.

"Everyone talks about holistic integration, but when I meet with clients and present what we can do from an integration point of view, they think it's terrific - but in the end they want to see a 30-second spot."

With this in mind, agency compensation models, now largely TV-oriented, will have to change. Said Roth: "Right now we are so focused on cost and where those costs are, that we are losing sight of the real value we are bringing to our clients. Frankly, our clients are losing sight of the value of what we are delivering."

As to sibling rivalry within IPG, Roth is determined this will end. Interpublic has initiated internal compensation programs to encourage its component agencies to work with each other for the benefit of clients.

He also referred to "an innovative letter of credit" designed, he claimed, to reduce borrowing costs - news of which caused a dive in IPG's stock price last week [WAMN: 08-Jun-06]. He dismissed this as Wall Street's fear of the unusual.

"I expected the stock to drop. The activity on the stock was totally a result of the unique structure of it [the deal]. I expect through the rest of the year it will level off when the impact of this transaction is understood in the marketplace."

Data sourced from AdAge (USA); additional content by WARC staff