Interpublic's CMG unit reports 6.5% revenue jump in Q4

The group contains Weber Shandwick and Golin, as well as other agencies such as Jack Morton and Octagon. Weber CEO Andy Polansky said the PR firms registered high-single-digit organic growth for the year and Q4.

Interpublic Group CEO Michael Roth
Interpublic Group CEO Michael Roth

NEW YORK: The unit that contains most of Interpublic Group’s PR agencies reported a 6.5% organic revenue gain in the fourth quarter of last year to $402.6 million (£278.4 million) on Friday morning.

For the full year, the Constituency Management Group’s organic revenue increased by 3.6% to $1.5 billion (£1 billion). The unit contains Weber Shandwick, Golin, as well as shops including Jack Morton, FutureBrand, and Octagon. Interpublic owns and operates Spong outside of CMG.

However, the unit’s revenues are only a fraction of Interpublic’s advertising-focused Integrated Agency Network, which reported revenues of nearly $1.8 billion (£1.2 billion) in the fourth quarter and $6.1 billion (£4.2 billion) for all of 2015.

Weber Shandwick CEO Andy Polansky explained that, both for the quarter and the year, the PR agencies within the CMG unit saw high-single-digit organic growth. On an as-reported basis, which includes the impact of currency and acquisitions, the firms saw mid-single-digit growth in both periods.

"We saw particularly strong growth from Weber Shandwick and Golin, and we believe we continue to take market share from our traditional peer group, but also from other marketing service agencies," Polansky said.

He added that Weber recorded high-single-digit organic growth for the quarter and double-digit growth for the year, on an organic basis, on top of double-digit organic growth the year before.

"That performance at Weber Shandwick was powered by our strength in digital, social, and content marketing," said Polansky. "We continue to take on more integrated assignments across paid, owned, earned, and shared media platforms."

Two-thirds of Weber’s growth came from existing clients, as the firm deepens partnerships around the world, he added. In terms of practice areas, Weber saw strong growth in healthcare, consumer, and corporate, and digital accounted for about 30% of the firm’s growth. 

More than 20 markets around the world registered double-digit organic growth, Polansky added

The holding company as a whole reported organic revenue growth of 5.2% in the fourth quarter to $2.2 billion (£1.5 billion) and 6.1% for full-year 2015 to $7.6 billion (£5.3 billion). However, on an as-reported basis, which does not take into account acquisitions or disposals, revenue was down 0.5% in Q4 and up 1% in the 12-month period. The group beat analysts’ expectations.

Broken down on a geographic basis, the Asia-Pacific region and the US led the pack in terms of organic growth. IPG’s US business saw organic growth rates of 6.2% and 6.8% for the quarter and full year, respectively, while its Asia-Pacific region was up 7.9% and 8.3%.

In the fourth quarter, the holding company’s international business saw 4.1% organic growth, including 7% growth in the UK, 5.5% in Latin America, and 0.6% in all other markets. Continental Europe reported a 0.8% organic revenue drop in the three-month period.

IPG’s international business reported a 5.3% organic revenue increase for all of 2015, including a 6.6% increase in the UK, 1.4% in Continental Europe, 4.7% in Latin America, and 4.8% in all other markets.

The holding company’s net income was down 4.9% for the full year to $480.5 million (£332.2 million); in the fourth quarter, it dropped 14.6% to nearly $283 million (£195.7 million). 

This story was updated on February 12 with quotes from Polansky.

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