NEW YORK: Revenues for Interpublic Group's (IPG) Constituency Management Group (CMG) fell 16% for the year, down to $915.1 million, from $1.09 billion in 2008. CMG's organic growth declined 13% from the previous year.
The year-end performance within CMG, which contains both PR and events firms, was brought down by the 24% decline in revenue year-over-year during the second quarter. The fourth quarter reported more positive results with a 6.5% decline in revenue, up from an almost 14% decline in revenue for the third quarter. Total Q4 revenues at CMG were $243.7 million, down from $260.7 million in 2008. CMG Q4 organic growth was down 10%.
Harris Diamond, CEO of CMG, said the company is seeing "significant improvement against a tough year."
"The biggest impact we've have in our business at CMG has been our events business," Diamond, who is also CEO of CMG firm Weber Shandwick, told PRWeek. "They had a tremendous drop in excess of around 35% over the course of the year, and that's where we saw the greatest impact of the recession." PR revenues declined 4.5% in the quarter, and 6.5% on an organic basis for the entire year, he said.*
Companywide, profit fell 55% in 2009 with total net income reported as $143.4 million, compared to $318 million in 2008. Global IPG revenues for the year were $6.03 billion, a 13% decline from $6.96 billion in 2008.
"Our 2009 results reflect the impact the recession had on revenue, but also the strong focus on cost discipline brought to bear by our management teams across the organization," IPG chairman and CEO Michael Roth said in a statement.
Fourth quarter revenue was $1.8 billion, down 5% from $1.9 billion in the fourth quarter 2008. Q4 organic growth was down 8%, while net income fell 31% to $159.7 million.
In the US, IPG reported a 7% drop in fourth quarter revenue to $909.7 million, and an 11% drop in year-end revenue to $3.37 billion.
In a conference call about the results, Roth said the holding company was seeing "further confirmation that the strategic decisions we've been taking in recent years are positioning the company for long-term competitiveness and growth."
He also noted that PR agencies Weber Shandwick and GolinHarris were continuing to perform well and growing their digital capabilities. Other firms within CMG include PR agencies MWW Group, DeVries, and Roger & Cowan, events marketing agencies such as Jack Morton, and sports marketing agency Octagon.
"On the PR side, being down 4.5% in the fourth quarter gives you sort of a sense that the business is restoring itself," Diamond said. "We think we're taking market share. We think, if the business continues to come back and the economy continues to come back, we see that happening again."
* CORRECTION: An earlier version of this article reported that PR's organic revenues for the fourth quarter were down 4.5% year-over-year. It was in fact overall PR revenues for the quarter, not organic.