IPG CEO Michael Roth said he is “very pleased” with the holding company’s “strong performance” for both the fourth quarter of 2019 and full year on this morning’s quarterly earnings call.
The holding company reported 3.3% organic net revenue growth for 2019, beating its 2-3% target. In the fourth quarter, it experienced organic net revenue growth to the tune of 2.9%.
In the U.S. specifically, organic revenue grew 2.1% during the fourth quarter. Roth said the holding company’s domestic growth was led by a “range of offerings,” specifically FCB and McCann’s healthcare agencies as well as creative shops MullenLowe and Carmichael Lynch. MullenLowe has won a number of new clients lately, including Hawaiian Airlines and Avis Budget Group. Earlier this year, Carmichael Lynch was named lead agency for Bush’s Beans.
Roth said that IPG is targeting organic revenue growth of 3% for 2020. IPG seems to be faring better than its competitors: last week, Publicis said organic growth declined 2.3% in 2019, while Omnicom’s grew 2.8%, slightly below IPG’s 3.3%.
“We are proud of our consistent level of achievement amid significant change in our industry and the dynamic environment in which we are all operating,” Roth said during the call, noting that “pretty much all” of its units, including brand experience agency Jack Morton Worldwide and entertainment marketing firm Octagon, performed well in the fourth quarter.
Roth also touched on the impact of coronavirus on the call, noting that the company has 2,500 employees in China and thousands of partners, clients and suppliers. He said most of its employees in China are working from home and are subjected to travel restrictions.
Considering China accounts for roughly 2% of IPG’s revenue, he said the financial impact of the outbreak is “not that significant,” but noted that it could eventually affect supply chain operations.
“What remains to be seen is what impact this will have on our suppliers and what impact that would have on U.S. companies and other global companies,” Roth said.
Roth also continued to sing the praises of database marketing firm Acxiom, which IPG acquired in 2018. He said IPG is “very happy with how the integration is going,” in particular the formation of Kinesso, a mar tech firm the holding company launched last year to help clients leverage Acxiom’s data and capabilities.
“We’re really pleased with how well that proposition is working, both with respect to new business pitches and getting the attention of our existing client base,” Roth said. “It’s very clear to us that it was the right decision for us to acquire Acxiom.”
When asked about how IPG is handling Google’s recent decision to phase out support for third-party cookies in Chrome, Roth said the company is “building ways to work around it,” but didn’t provide much detail.
“We’ve been worried about cookies and the regulatory environment with respect to Google for years,” he said. “We’re highly confident that we will have a solution in place to address that issue. We’re working closely with Google and other providers to make sure that in fact happens.”