|July 26, 2012|
|IPG Cites 'Headwinds,' But PR Posts Strong Gains in Q2|
|By Greg Hazley|
|Interpublic reported second quarter organic growth in the U.S. declined 3.2% amid “headwinds” from losses in 2011 and fell 0.8% across the ad/PR conglomerate, but its PR operation bucked that trend with strong gains for the quarter.|
Overall IPG revenue for Q2 fell 1.4% over 2011 to $1.7B, including a 3.7% drop in the U.S. to $950.9M. Net income slid 3.1% to $105.5M in Q2.
But IPG’s Constituency Management Group, which includes PR units like Weber Shandwick and GolinHarris, saw organic revenue climb 8% (8.7% overall) during Q2. Its advertising-laden Integrated Agency Networks unit fell .5% organically (-3.3% overall) to $1.4B.
PR on its own saw organic growth of 5.7% (7.2% overall) during the quarter and an increase of 4.2% organically for the first six months of the year.
Harris Diamond, CEO of the CMG unit, singled out Weber Shandwick, DeVries and GH for strong performances in the quarter and told O'Dwyer's PR is capitalizing on opportunities it didn't have in the past to pitch against other disciplines for business. [GolinHarris today announced the win of eBay Classifieds Group's Asia account.]
Diamond said PR showed continued strength across the board with only "softness" in public affairs, a typical dropoff ahead of a presidential election which came earlier than in previous cycles.
Chairman and CEO Michael Roth said the global economic situation remains uncertain and will require “vigilance” through the rest of 2012, but he maintains IPG’s goal of 3% organic revenue growth for the year.
“Once again, we demonstrated the ability to effectively manage the business so as to improve profitability, despite these headwinds,” he said.
Latin America and Asia Pacific boosted earnings with organic growth of 27.2% and 14.3%, respectively.
Publicis last week said organic growth inched along at only 1.6% amid a "volatile and uncertain" global economic climate. Like Interpublic's Roth, Publicis CEO Maurice Levy also said "vigiliance" is required.
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