NEW YORK: Interpublic Group's (IPG) Constituency Management Group (CMG) saw a 19% year-over-year decline in its third quarter revenues. It reported $234.8 million in revenues, compared to $289.9 million in Q3 2008.
For the first nine months of the year, revenue for CMG, which houses the holding company's PR and event marketing firms, was $671.4 million, down 19% from $831.2 million in the year-ago period. Additionally, organic growth for CMG declined 16% in the third quarter and 14% for the first nine months.
In a call about the results on October 28, IPG chairman and CEO Michael Roth called out Weber Shandwick and GolinHarris for being "consistently recognized for the outstanding quality of their work, which has allowed them to keep outperforming the broader PR sector." Additionally, he said sports marketing agency Octagon "had growth this quarter."
CMG's other PR firms include MWW Group, DeVries PR, Rogers & Cowan, and Carmichael Lynch Spong, among others.
Harris Diamond, CEO of CMG and Weber Shandwick, told PRWeek, "When I take a look at how PR has done year-to-date, our group on the PR side is down approximately 6%," with automotive and finance contributing to the downturn.
"I think we're feeling reasonably good about this,” Diamond added. “New business picked up in the third quarter, starting over the course of the summer. It's probably a little too early to call for next year, but in our business, when you see a lot of new business opportunities, it generally bodes well."
Companywide, IPG's Q3 revenues declined 18% year-over-year to $1.43 billion, and for the first nine months of the year, revenue was $4.23 billion, down 16.5% from $5.06 billion for the same time period in 2008.
Declines in revenue were due in part to decreases in the technology, automotive, and telecoms sectors, as well as the group's event business. In the earnings statement Roth said that "Client sentiment has stabilized, but remains cautious."
"We've also begun to see an increase in new business activity, which earlier this year, had essentially ground to a halt in many world markets," Roth added during the call. "Though this isn't a definitive indicator of an advertising recovery, it's certainly an encouraging sign."
Net income for the quarter tumbled 47% to $24.1 million. Year-to-date, net loss was $15.1 million, compared to net income of $78 million for the same time period in 2008.
A review of all major industry pitches over the past year saw IPG agencies included, as well as winning "in a broad cross-section of our agencies," Roth added. "This tells me that our offerings are fully competitive and when the economy's recovery does take hold, we will be in position to return to the levels of competitive organic revenue growth that we achieved during the past two years."
The company said it controlled costs by cutting down on office and other general expenses, as well as salaries. It shed 11% of its workforce in the last year, or 5,100 employees.