Interpublic Group's quest to sell NFO WorldGroup is down to three bidders, the holding company's search for a COO is quietly progressing and its board of directors will hear presentations from global agency chiefs this week.
What's more, IPG is preparing to report its fourth-quarter and year-end results for 2002, possibly next week. On top of all that, IPG CEO John Dooner is said to be stressing the need for across-the-board belt-tightening.
McCann-Erickson, for example, has been told to slice some $10 million from its North American budget "immediately," said a source. A McCann rep referred calls to an IPG rep, who declined comment.
The call for cuts is directed toward achieving IPG's goal of reaching an overall operating margin of 13 percent by the end of 2003. Last year, the company produced an estimated margin of 10.8 percent.
While IPG shops hope to achieve some organic growth this year, much depends on how clients rebound from the recession. It is clear that the margin goal will not be reached by growth alone, said a source.
Budgets cuts are "just part of the process," the source added. Furthermore, the source noted that IPG has told Wall Street that it's "going to make a certain margin. That's being taken seriously."
The board presentations by Lowe, McCann and Foote, Cone & Belding about their performance were on course late last week, but one source said the agenda might change.
As for the NFO sale, three suitors remain in contention: United Business Media, Aegis and Taylor Nelson Sofres, which is seen as a long shot, said sources. IPG executives are still hopeful that they will get more than $500 million for NFO—well below the $624 million it paid in 2000 but enough to convince IPG's banks to loosen the covenants on their loans.