IPG PR revenues increase despite group-wide loss

NEW YORK: Interpublic Group's PR business was a bright spot for the holding company in the first six months of the year, although its overall revenues were down.

NEW YORK: Interpublic Group's PR business was a bright spot for the holding company in the first six months of the year, although its overall revenues were down.

IPG posted second quarter revenue of $1.53 billion, down 4.8% from the second quarter of 2005. Total revenue for the first six months was $2.86 billion, down 22.7% from a year ago. IPG reported an organic revenue decline of 3.1% in the second quarter, but in the first six months, organic revenue grew 0.5% compared to 2005.

Constituency Management Group, the IPG division that houses its PR agencies, posted revenues of $238 million in the second quarter, representing a positive growth of 5.8%. For the first six months of the year, CMG's revenues were $456 million, up 4.3% from 2005.

In a conference call, IPG CEO Michael Roth noted "particularly good momentum in marketing services," and said IPG's growth "is being driven primarily by the two major PR brands," Weber Shandwick and GolinHarris.

Frank Mergenthaler, the CFO of IPG, said that "growth in the US was led by PR," and added that international growth was led by the CMG segment.

Harris Diamond, who leads both CMG and Weber Shandwick, said that all of IPG's PR agencies had a strong quarter, which he attributed to "A combination of clients continuing to consolidate business, and at the same time clients investing in additional geographies."

Diamond declined to make any projections for the remainder of the year.

Roth said that IPG plans to focus on the China market in particular for continued investment. He also said that spending by the company's 20 largest clients was "trending upwards."

IPG projected that it will have roughly flat organic growth for the year of 2006, but that it will post "competitive organic growth" by 2008.

IPG's PR agencies include Weber Shandwick, GolinHarris, MWW, and DeVries.

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