IPG Follows Ad Network Competitors with Return to Growth as Customers Rise in Spending

IPG followed its competitors in the holding company with a return to growth in the first quarter of 2021.

The business saw organic net sales growth of 1.9%, which equates to net sales of just over $ 2 billion for the quarter. This built on the fact that the group surpassed expectations and peers in the fourth quarter of last year.

IPG Managing Director Philippe Krakowsky noted that the first quarter is typically IPG’s smallest seasonal quarter, although he said he was encouraged by the strategic changes of his clients.

“The return to organic revenue growth is a sign that our clients have started to adopt an investment mindset as they seek to grow their brands and grow their businesses in line with the wider economic recovery,” did he declare.

IPG results: a review

  • The financial success of IPG was largely based on reducing costs by reducing salary expenses by 4% and eliminating 1,500 positions.

  • Krakowsky acknowledged that the changes during 2020 laid the groundwork for the results: “Our return to growth, coupled with the benefits of the strategic restructuring actions taken last year, and certain variable expenses which remain at very low levels, led to an exceptional margin performance this quarter. “

  • He also told investors that the group’s performance was aided by the elimination of many costs, including business travel due to the pandemic.

  • Krakowsky conceded that after the uncertainty of 2020, IPG’s conversations with customers focused on returning spending and interest levels to pro-pandemic levels.

  • Krakowsky therefore believes that IPG can achieve between 5 and 6% organic growth during 2021.

  • Krakowsky noted that, like its competitors, IPG has experienced strong growth in the media, data and technology sectors. This growth has been particularly strong in Europe, reaching a 12.4% year-over-year increase across the continent. – and he identified the activities of McCann Worldgroup as a key driver.

  • Other categories contributing to growth include food and beverage, health care, and financial services. However, the UK only recorded organic growth of 3.4%.

  • Conversely, event and sports marketing was a notable source of negative growth for the company, again in line with other holding companies.

  • IPG Chief Financial Officer Ellen Johnson said: “We made progress in all international regions, which is a significant improvement from the fourth quarter. Continental Europe grew 12.4% with increases in all major national markets including Spain, Germany, Italy and France, driven by increased spending from existing customers with a double-digit growth.

  • Johnson says IPG saw strong gains in Australia and Singapore, while China and Indiarevenues from decreased with particularly strong results in Mexico, Colombia and Argentina. She also said there were “good performances especially in the Middle East”.

Return to organic growth

  • Krakowsky noted that the first quarter is generally IPG’s smallest seasonal quarter, although he was encouraged by the strategic changes of its clients.

  • IPG is also optimistic about the performance of its creative solutions, as Krakowsky said: “WeWe see more and more of the time people spend online, choosing content that is engaging, informative, entertaining, or a combination of the three, and this is what makes the creative side of our business so vital.

  • He also noted that IPG is investing in data tools in anticipation of further changes in user data and privacy, noting that regulatory changes need to be adapted rather than influenced.

  • “We have developed a data infrastructure that underpins the entire portfolio of our agencies and provides solutions to a wide range of business problems through what we call the open architecture model. “

  • Net income was $ 91.7 million from the first quarter. IPG said that with the improvement in the tone of business and visibility, and a sustained public health and macroeconomic recovery, it should be positioned to generate organic growth of 5.0% to 6.0% for the full year 2021 and an adjusted EBITA margin of around 15.5%.

// Featured in this article

Comments are closed.