IPG's CMG reports increases in revenue, organic growth

NEW YORK: Interpublic Group's (IPG) Constituency Management Group (CMG) reported revenue of $221.8 million in Q1 of 2010, a 5.4% increase compared to the $210.4 million it reported in the first quarter of 2009.

NEW YORK: Interpublic Group's (IPG) Constituency Management Group (CMG) reported revenue of $221.8 million in Q1 of 2010, a 5.4% increase compared to the $210.4 million it reported in the first quarter of 2009. Organic revenue for CMG was up 2.1%.

Harris Diamond, CEO of CMG, told PRWeek that the PR agencies "were up approximately 6.5% with our reported revenue. On the PR side, it was an overall good quarter."

In the earnings presentation on April 29, IPG chairman and CEO Michael Roth singled out Weber Shandwick and GolinHarris as PR agencies that performed well in the first quarter. Other PR firms in CMG include MWW Group, DeVries PR, and Roger & Cowan.

"We see our PR assets consistently winning market share," said Roth during the call.

Diamond noted all major industries performed well during the first quarter, including public affairs, healthcare, consumer, and technology. The agencies are also looking to social media marketing and multicultural marketing as areas of growth in the future.

Frank Mergenthaler, CFO of IPG, was also on the investor call and said sports marketing, also within CMG, had double-digit growth, while "the events business, which had a tough time last year, has stabilized and was slightly negative on a worldwide basis."

Overall revenue for IPG was $1.34 billion in the first quarter of 2010, a 1.2% increase over Q1 2009. In the US, IPG's revenue was $803.1 million, up 2.8% from $781.4 million last year. Organic growth declined 2.9% in the first quarter, compared to an 8% drop in Q4 of 2009.

Roth said better organic growth "further supports our belief that the broader economic conditions have stabilized and we'll keep seeing progress as we move through 2010."

Revenue in March was stronger year-over-year, he added, compared to January and February, showing that the company was continually increasing revenue performance.

The holding company focused on the fact that salaries and related expenses dropped 1.7%, or 5.7% organically, compared to the same quarter in 2009. But, it reported that the company added employees in the first quarter, after five quarters of reductions.

Diamond said the PR agencies "have been cautiously hiring."

IPG was recently in the news for losing its Chevrolet business, which consolidated its US advertising with Publicis Groupe.

"While it's true that we had a few client losses that made news in recent weeks," Roth said, "our pipeline is strong and we remain net new business positive."

"I think what we're seeing is a decent flow of RFPs, but real growth is still coming from expanding our reach with current clients," Diamond said. "That is the still best growth that is out there."

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