CMG earnings outshine rest of Interpublic in Q2

NEW YORK: Interpublic Group's PR firms saw organic revenue growth of 5.7% in the second quarter and 4.2% in the first half of the year, compared with 2011.

NEW YORK: Interpublic Group's PR firms saw organic revenue growth of 5.7% in the second quarter and 4.2% in the first half of the year, compared with 2011.

Harris Diamond, CEO of the holding company's Constituency Management Group and agency Weber Shandwick, said growth can be attributed to opportunities in social media, expansion of global work, and organic growth in traditional business.

“Weber Shandwick, GolinHarris, and DeVries in particular all had a terrific six months,” Diamond said.

The CMG unit includes those three firms, Current Lifestyle Marketing, and Rogers & Cowan. The holding company also owns and operates Carmichael Lynch Spong and the Axis Agency outside of CMG.

CMG reported a second-quarter organic revenue increase of 8% to $292.4 million, year-over-year. For the first six months of 2012, the unit reported revenue of $555.3 million, up 8.3% organically compared with the same period in 2011.

Diamond said CMG saw Q2 US organic growth of 5.4%, and international organic growth of 13.6%, compared with the previous year.

China and Brazil are two markets where CMG has seen “terrific growth,” and the Middle East and Indonesia are also seeing business increase significantly, Diamond said.

Despite a slight slowdown in public affairs in the US because of the election year, Diamond added that all PR sectors are growing, including healthcare, government work, and consumer.

He added that although the “world is still a very uncertain place,” he's “very optimistic” about CMG's outlook.

Interpublic reported an overall 0.8% organic increase in second-quarter revenue, year-over-year, to $1.72 billion.

The holding company's US business saw an organic revenue decrease of 3.2%, while international revenue grew 6% organically year-over-year. Net income in Q2 was $105.5 million, down about 3.1% from the previous year. The company's operating income was $176.4 million, with margins of 10.3%, in the second quarter.

For the first half of 2012, IPG reported revenue of $3.22 billion, an organic increase of 1.7% compared with last year. US revenue was down 0.4% organically in the first six months of 2012. Operating income was $137 million in the first half of this year.

At the beginning of this month, GolinHarris bought Virgo Health, a UK healthcare communications firm. Weber amped up its brand work with PepsiCo in the second quarter, adding Mountain Dew to its roster in April and Diet Pepsi in May.

In June, Weber and Hill+Knowlton Strategies settled their long-running legal dispute out of court. Weber had accused H+K and two senior executives of stealing confidential information, clients, and employees from Weber.

Organic growth represents change in revenue without measuring the impact of acquisitions and disposals.

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