IPG outperforms peers, posting strong organic growth for Q3
- Interpublic Group of Companies (IPG) posted strong Q3 earnings Friday, with a net revenue increase of 3.4% to $1.9 billion, per a company press release. Organic net revenue increased 5.4% globally and 5% in the U.S. for the ad holding giant.
- The company announced it completed the acquisition of Acxiom Marketing Solutions, Acxiom's data marketing division, on Oct. 1. The $2.3 billion deal was announced in July. IPG reported an operating income of $262 million for the quarter. That figure reached $273 million excluding Acxiom transaction costs.
- "We are extremely pleased with our performance this quarter and year-to-date," Michael Roth, IPG's chairman and CEO said in a statement. Roth attributed the results to strong work in media and the growth of IPG's creative networks, agencies and digital offerings.
Friday's earnings mark the third consecutive quarter of healthy performance for IPG at a time when many of the ad holding giant's peers are on less sturdy footing. Both Publicis Groupe and Omnicom reported lower organic net revenue than IPG in Q3 earnings released earlier this week, with the former announcing plans to auction off a financially cumbersome part of its business, healthcare unit Publicis Health Services.
Omnicom's earnings were decent overall, but the company also revealed it had laid off roughly 7,000 employees. WPP, yet to report earnings, has in the past few weeks lost significant client business, including accounts for PepsiCo, American Express and parts of its work with Ford, which was handled by a dedicated agency for the automaker called GTB.
It's too early to tell just how much the acquisition of Acxiom Marketing Solutions will bolster IPG's business going forward, but the deal could be a strong draw for brands interested in agencies with better data expertise. In purchasing the Acxiom unit, IPG netted 2,100 new data and analytics professionals.
"With the completion of the Acxiom acquisition, we have a strengthened position to help clients succeed in a world where data-driven marketing solutions are increasingly core to brands' success," Roth said in a statement.
AmEx last week switched media agencies of record from WPP's Mindshare after roughly 20 years of working together to IPG's Universal McCann. AmEx had previously partnered with Acxiom to develop a service called Predictive Intent Segments that helps the financial services giant to better target marketing messages. Speaking on the account switch, AmEX CMO noted Universal McCann was selected for its media, technology, data and insights capabilities.
Roth said he expects IPG will be able to hit its net organic revenue growth targets of 4% to 4.5% for 2018. The targets were upgraded after the company beat Q2 expectations in July.
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