Q3 Revenue, Income Gains at IPG

NEW YORK Interpublic Group today reported net income of nearly $39 million for the third quarter of 2008 on revenue growth of 11.5 percent compared to the same period last year.

The net income figure represented a significant positive swing from the net loss of nearly $29 million that IPG recorded in Q3 2007. IPG ended the quarter with revenue of $1.74 billion, up from $1.55 billion in the third quarter of last year.

The first nine months of 2008 told a similar story, with IPG recording net income of $56.7 million, up markedly from a $31.5 million net loss in the same period last year. Revenue grew 11 percent in the comparable periods, from $4.57 billion to $5.06 billion.

On an organic basis, revenue grew nearly 8 percent for the quarter and 6 percent for the first nine months.

Advertising analysts congratulated IPG CEO Michael Roth on the results during an hour-long conference call and Roth was, of course, pleased. “Our performance — for both the quarter and the year-to-date — are the strongest that IPG has delivered in many years,” he said, adding “all of our major units are showing improvements in their financial performance thus far this year.”

Signs of the crisis in financial markets influencing clients tempered Roth’s enthusiasm, however. “During the past month or so, as the crisis began to impact the global economy, we’re seeing it beginning to weigh on marketers’ plans for both the fourth quarter and 2009. This makes the prospects of a slowdown in client spending much likelier,” he said.

Added Roth: “We have experienced a limited number of delays and cancellations of some fourth-quarter project [work] spending. There is no clear pattern to it, though we are seeing softness in the financial sector and [the automobile industry] continues to be hit. By region, we are seeing softness in Japan and some softness in project spend in European markets.”

Roth told analysts that clients are putting a premium on marketing tactics whose results can be measured clearly. Some clients are “being very, very cautious. So, we have to show that we can move the needle,” he said.


IPG rival Publicis Groupe released its Q3 numbers today, reporting a 4 percent rise in organic revenue and predicting rough times ahead for the ad business.