Strong digital growth spurs Interpublic to defy analysts’ predictions

Interpublic Group of Companies has reported a 11% rise in third quarter revenue, thanks in large part to the company’s growing digital offering.

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Interpublic, whose agencies include McCann Worldgroup, Draftfcb and UM, earned $1.73bn (£1.07bn) in the three months to 30 September, up from $1.55bn (£967m) for the same period last year.

IPG chief executive Michael Roth says that digital spend, chiefly with agencies R/GA and Huge, was a major contributor to the company’s growth, as was increased investment in the automotive industry, finance, retail and food and beverage.

“Despite the European debt crisis and tempered growth in the U.S. economy, Interpublic stands by its year-end targets of 4-5% organic revenue growth and 9.5% or better operating margin,” Roth told analysts during a conference call. “We’ve seen little in the way of pullbacks among clients, despite the economic climate.”

More than 60% of the company’s net income gain ($127m) came from the sale of a portion of its stake in social network Facebook.

The company saw UK revenue increase 4.3%, while Continental Europe decreased by 1.8%. Interpublic’s U.S. revenue, its biggest top-line contributor (60%), rose 8.6%, while international revenue grew 15%.

Interpublic reported third-quarter organic growth, which excludes acquisitions and divestitures, of 8.7%, the highest among advertising networks reporting financial results for the same period so far.

Omnicom, Interpublic’s larger US peer posted a 7.2% rise in organic growth for the third quarter, while WPP, the world’s largest advertising network by revenue reported organic growth of 4.7% for the same period. Havas revealed organic growth revenues were 7.3% for the same period, and Publicis Groupe posted a 6.4% gain in the metric.

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