NEW YORK: The PR firms within Interpublic Group’s Constituency Management Group registered low-single-digit growth on both an organic and as-reported basis in Q1, said Andy Polansky, the division’s chairman and CEO.
That increase was in comparison to mid-single-digit organic and low-single-digit as-reported growth in Q1 2019.
The PR firms in CMG are Weber Shandwick, Golin, DeVries Global, Current Global, Rogers & Cowan/PMK and the Axis Agency. The unit also includes marketing specialist firms such as Jack Morton, FutureBrand and Octagon. Other Interpublic PR firms operate outside CMG.
As a whole, CMG posted revenue of $307.6 million in Q1, up 3.7% organically from last year. Organic growth represents change in revenue without taking into account the impact of acquisitions or disposals.
“Our Q1 results are not indicative of the challenging environment we see ahead, but they are indicative of the strength of our brands and market position,” said Polansky.
Golin and Weber had a particularly strong Q1, he noted. Golin was powered by a series of new business wins, building on a streak that began in the second half of 2019, that included Logitech’s North American business and Dole Packaged Foods’ social purpose work. Weber saw a strong performance by its healthcare units and management consultancy United Minds, Polansky said.
Global Citizen hired Weber for media strategy, crisis and issues counsel for its One World: Together at Home live-streamed event that aired last weekend. The event raised $128 million from corporate donors for coronavirus-related charities.
“We are doing a lot of engagements through our United Minds consulting business as companies are rightly focused on employees,” said Polansky. “At first, we were very involved in the response phase, but as the clients work toward recovery, we will see that type of consulting work more and more valued and that is an opportunity for us to continue to add value.”
Current Global and ReviveHealth also had a solid quarter and Rogers & Cowan/PMK started to get momentum as its business units integrated after merging last summer, said Polansky.
The PR firms in CMG had strong performances in North America, Latin America and the U.K., he added.
“From a sector perspective, healthcare continues to be very strong,” said Polansky. “Some of our key consumer products clients have upped their spending levels.”
For the entire holding company, IPG’s reported net revenue was $1.97 billion, down 1.6% from the prior year on an as-reported basis, but representing organic net revenue growth of 0.3%. Net income was $4.7 million, compared with a loss of $8 million a year ago.
On the company's earnings call on Wednesday morning, Interpublic chairman and CEO Michael Roth said he is seeing a range of outcomes for CMG.
"There continues to be demand for the advisory side of the business especially in the PR space," he said. "This means we're seeing opportunities for crisis communications and strategic services from the group. However, as you would expect, other parts of the business such as experiential and sports marketing are being hit."
Roth added that staff reductions will be "unavoidable" due to the pandemic.
In response to the COVID-19 pandemic, Polansky explained that he and other members of the CMG leadership team have taken pay cuts. The agencies are seeing postponements and cancellations of events and sports-related activities, he added.
Asked if the pandemic has led to layoffs at CMG agencies, Polansky said that “given the diversification of our portfolio, we have seen different impacts across our companies, so we are monitoring that and taking actions as appropriate.”
This story was updated on April 22 with comment from Roth.