NEW YORK: Fourth quarter revenues dropped 12.8% for the Constituency Management Group (CMG) division of The Interpublic Group (IPG), which contains the holding company's PR agencies, going to $260.7 million from $299 million in the year-ago period. Organic growth decreased 6.3%. For the overall year, though, which ended December 31, 2008, CMG's revenues were up 4% to about $1.1 billion. Organic growth for the year at CMG was up 6.2%.
IPG's PR firms included in the CMG unit are Weber Shandwick, GolinHarris, MWW Group, DeVries, and Carmichael Lynch Spong. The unit includes non-PR firms as well, such as KRC Research and FutureBrand.
"Our PR business demonstrated good resiliency with organic growth in the high single-digit range,” said Frank Mergenthaler, EVP and CFO at IPG, during the earnings call. “But the fall off in Q4 event business and decreases in our sports marketing business show us disproportionately in this segment.”
An IPG source that declined to be named also told PRWeek that the CMG division's Q4 revenue decline was largely attributable to a significant slowdown in business at its event planning agencies. These include sports and entertainment marketing firm Octagon and experiential marketing-focused Jack Morton.
Although revenues were down slightly companywide, profit was up. IPG reported revenues of $1.9 billion in Q4, a 4% drop from the $1.98 billion it garnered during the same period of 2007. However, net income was up for the quarter to $217 million, compared to $178.4 million in Q4 last year.
For the entire year, the holding company reported revenues of $6.96 billion, a 6.2% growth over 2007's year-long revenues, and a sharp increase in income. Its net income for 2008 was $295 million, compared to the $167 million it earned in 2007.
"Due to unprecedented conditions, the next several quarters will be very challenging," noted Mergenthaler, during the call.
Compared to the CMG unit, IPG's Integrated Agency Networks group (IAN), which includes ad firms McCann and Draftfcb, Q4 revenues were down less than 3% to $1.64 billion, compared to $1.68 billion last year. For the year, revenues at IAN grew 6.6% in 2008 to about $5.87 billion.
Updated February 27, 2009, 1:51pm