Interpublic Group revealed that it is placing a huge bet on the importance of digital marketing—with the purchase of a majority stake in interactive agency Huge, which creates Web sites and Web-based businesses for clients.
IPG revealed its acquisition of a 51% interest in Huge in exchange for an undisclosed sum during a conference call earlier this week following the release of its Q2 2008 financial results.
With offices in New York, Los Angeles, Atlanta and London, the nine-year-old Huge specializes in helping clients build Internet brand presences that extend beyond Web sites to include e-commerce or other methods of monetization, including ad support.
The company has developed Web businesses for such brands as Ikea, JetBlue, Nokia, British Airways, NutriSystem, Scholastic and The Warner Music Group. Huge will continue to operate under the leadership of its four founding partners: David Skokna, Sasha Kirovski, Gene Liebel and Aaron Shapiro.
“Marketing services in the interactive space has evolved well beyond site development and interface design,” IPG Chairman and CEO Michael Roth said in a statement. “As a result, our clients no longer think of digital design as just a messaging medium. They view it as a proven tool which provides users with experiences and functionality that drive their businesses. These are the areas in which Huge excels.”
“Our success has been an outgrowth of that fact we were among the first agencies to organize around the creation of meaningful user experiences and large-scale, sustainable online businesses,” said Skokna, who serves as Huge’s executive creative director.
The connection to IPG, one of the largest marketing holding companies in the world, should pace the way for more overseas expansion for Huge and for the creation of more global campaigns.
Earlier this week, IPG also announced a majority stake in the Dubai-based Middle East Communications Network, with offices in 14 countries around the Middle East and North Africa.
In its quarterly report, IPG announced that net income for Q2 2008 was approximately $88 million, more than 30% lower than earnings of $121.5 million in the same quarter last year. However net income for the first half of the year, calculated at $18.2 million, was an improvement over the company’s $2.7 million net loss for the first six months of 2007.
IPG serves as holding company to numerous global marketing agencies, including McCann Erickson, Universal McCann, Lowe and DraftFCB.
In April 2007 the company bought search marketing consultancy Reprise Media outright, in a move meant to bring digital search capabilities in-house. The cost of that deal was not disclosed.
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