NEW YORK: Interpublic Group's PR firms saw organic revenue growth of 5.9% in the third quarter, compared with Q3 2011.
The holding company owns and operates Weber Shandwick, GolinHarris, DeVries, Current Lifestyle Marketing, and Rogers & Cowan in its Constituency Management Group. It also manages Carmichael Lynch Spong and the Axis Agency outside of CMG.
CMG reported a third-quarter organic revenue increase of 14% to $337.9 million, year-over-year. In the first nine months of 2012, the unit reported revenue of $893.2 million, up 10.4% organically compared with the same period of last year.
Interpublic reported an overall 0.9% organic revenue decrease in the third quarter to $1.67 billion, year-over-year. That reflects 5.2% growth internationally and an organic revenue drop of 5.4% in the US. Net income for IPG in the third quarter was $67.7 million, down 68.9% from $217.5 million in the same period of last year. The holding company's operating income was $131.4 million, down about 24% from $173.2 million in Q3 2011.
Interpublic's US business reported organic revenue of $940.5 million in the quarter, down 5.4% year-over-year. For the first nine months of 2012, the US reported organic revenue of $2.8 billion, a 2.2% decrease from 2011. For the first nine months of 2012, IPG reported overall organic revenue of $4.89 billion, up 0.8% year-over-year.
Harris Diamond, CEO of CMG and Weber, attributed growth to content creation across sectors, as well as an increase in the need for and recognition of services in its corporate and consumer practices. He said the UK saw the largest growth in Q3 in CMG because of the 2012 London Olympics.
“We' re continuing to see the marketing dollar be divided in a way where earned media is just becoming more recognized by CMOs and CEOs, so it's a good secular shift that seems to be taking place over the last two or three years towards PR,” he explained.
He added that while Weber and GolinHarris were recognized on the Friday morning earnings call, all Interpublic PR firms performed well, especially in terms of organic client growth.
“Sixty percent of the growth comes from, in my mind, the ability to increase within current clients,” said Diamond. Over the next three to four months, he added IPG's PR firms will look to enhance their work in Asia and Latin America.
Earlier this month, Ocean Spray expanded Weber's responsibilities to include b-to-b PR work for its Ingredient Technology Group. The agency has served as AOR for the cranberry company's branded consumer-facing business since 2000. Also in October, the Centers for Medicare and Medicaid Services selected Weber for a $3.1 million contract to raise awareness about state healthcare insurance exchanges that will be run by the federal government.
At the beginning of October, DeVries merged with sister agency Slam PR in London, launching the firm's first office in Europe.
Organic growth represents change in revenue without measuring the impact of acquisitions and disposals.