Interpublic revenues hit by auto industry turmoil
Interpublic, the holding company for marketing agencies including DraftFCB, Futurebrand, McCann Erickson and Lowe, has posted an organic revenue decrease of 14.5% for the second quarter of this year.
The first half drop in organic revenues is 10.5%, demonstrating that conditions worsened in the second quarter.
The company has posted second quarter revenue of $1.47 billion (£892 million) compared with $1.84 billion (£1.11 billion) year-on-year. Approximately 4% of the organic revenue decrease is attributable to a decline in advertising from its agencies’ automobile clients and revenues from the events marketing discipline.
The second quarter figures split into $847.1 million (£514.4 million) from US operations and $627.3 million (£380.9 million) from international operations.
First half organic revenue dropped 10.5%, totalling $2.8 billion (£1.7 billion) compared to $3.32 billion (32 billion) year-on-year.
The company recorded operating income in the second quarter of $96.9 million (£58.8 million), compared to $200.6 billion (£121.8 million) for the same period in 2008.
Interpublic chairman and CEO Michael Roth (pictured) says: “Our second quarter results reflect the impact of the global economic downturn on our industry. We have responded to difficult market conditions with effective cost control across the organisation. We also recently took steps to further strengthen our balance sheet, which positions us to successfully move through the current economic turmoil.”
He added that that all the company’s agencies were competitive in the marketplace and that “we are active in major pitches at the local and global level.”
Other marketing services holding companies are experiencing similar pain with Publicis Groupe, owner of Starcom and Saatchi & Saatchi, posting a revenues drop of 6.6% for the first half of the year http://www.marketingweek.co.uk/news/publicis-sees-revenues-slide-and-“slow-recovery”/3002750.article
The group recorded organic revenues down €2.2bn in the six months to 30 June, hit by the bankruptcy of client General Motors in the US and the global recession.
