Interpublic Group’s Fortunes Rise In 2008
The Interpublic Group of Companies generated just under $7 billion in revenue during 2008, up from $6.55 billion in 2007. The company’s net income doubled from $131.3 million to $265.2 million between 2007 and 2008, as the revenue increase was combined with cost containment measures.
In 2008, expenses made up 62.4% of its revenue, compared with 63.2% in 2007 and 63.7% in 2006. Operating margin in 2008 amounted to 8.5% of its revenue, up from 5.3% in 2007 and 1.7% in 2006.
No single client accounted for more than 5% of its revenue in 2008. The company’s largest clients – in alphabetic order – were General Motors Corp.; Johnson & Johnson; Microsoft; Unilever; and Verizon. In the aggregate, the company’s top 10 clients made up roughly 26% of its revenue in 2008, approximately the same level as they did in 2007.
The company generated around 55% of its revenue from U.S. clients, a figure on par with 2007’s level. Interpublic’s holdings include several advertising and marketing services companies, including McCann’s MRM, Momentum and Healthcare operations; Draftfcb; Lowe; and Constituency Management Group.
A good chunk of Interpublic’s 2008 growth came from its Asia-Pacific, Latin American and “Other” locations (the latter probably includes China). “Other’s” revenue increase led the pack at 20.6% growth, followed by Asia-Pacific (13.1%) and Latin America (12.5%). According to Interpublic, the year saw net client wins in Brazil, China and Spain. In comparison, U.S. growth was only 3.7%, while U.K. revenue rose by 1.5% and Continental Europe jumped by 7.5%.
The Observer’s Take: A fun fact: While Interpublic’s total employee base rose from 43,000 employees in 2007 to 45,000 in 2008, its U.S. workforce remained steady at 19,000. Speak Portuguese or Mandarin? Might not be a bad time to send IPG a resume…One cause for an eyebrow-raise or two at IPG: The company says it traditionally generates more revenue during the second half of a year than in the first half. What, then, to make of fourth-quarter 2008 revenue amounting to 27.3% of the total year’s take, compared with fourth-quarter revenue in 2007 and 2006 making up 30.3% of its full-year revenue?
