NEW YORK: Turnaround at Interpublic Group, by billings world number three marketing services network, still eludes chairman/ceo Michael I Roth (pictured) - the accountant who joined the company's board in 2002 to chair its audit committee, became executive chairman in July 2004 and added the ceo role six months later.
Initially hailed as a Great White Hope, Roth has yet to fulfil that expectation after thirty-four months as sole helmsman, and neither he nor IPG stockholders will be pleased at its third-quarter performance: a net loss of $21.9 million (€15.12m; £10.5m).
The numbers compare with a profit of $3.7m in the year-ago period, although Q3 2007 is exceptional in that it reflects substantial staff severance costs and an increase in operating costs.
Despite sweeping staff cuts at DraftFCB and Lowe Worldwide (in the year to date over one thousand heads lighter) the group employee count remains virtually the same thanks to hirings in IPG's digital, public relations and direct marketing shops.
But there's good news too. Q3 revenues grew 7.3% to $1.56bn, up year-on-year from $1.45bn. The rise is attributed to organic growth in IPG's advertising and media agencies and a string of new business wins at PR shop Hill Holliday.
Roth's intends to go for growth rather than maximisation of margins. "I'm not taking our foot of the accelerator here," he told investors during a conference call last week.
Nonetheless, IPG still aims for double-digit growth in the current fiscal year, although Roth qualified that target, warning that 8.5%-9% is a more likely result.
And having just concluded a two-way pitch against WPP Group for the $760m Dell Computer account, IPG's behind-the-back corporate fingers are crossed.
Data sourced from AdAge.com; additional content by WARC staff