The holding company, which counts Weber Shandwick and GolinHarris among its stable of PR agencies, revealed that PR revenues had grown in the fourth quarter of 2008.
While revenues at the CMG unit which houses its PR agencies slumped by 13 per cent during the quarter, senior IPG executives attributed this to a steep decline in its event and sports marketing business.
‘Our PR business demonstrated good resiliency with organic growth in the high single-digit range,’ said IPG CFO Thomas Cunningham. ‘But the fall off in Q4 event business and decreases in our sports marketing business show up disproportionately in this segment.’
For the full year of 2008, the CMG unit grew revenue by four per cent to US$1.1 billion, out of total IPG revenues of $6.96 billion. ‘Within our own offering, many of the marketing services offerings are holding up,’ added IPG chairman and CEO Michael Roth. ‘We’ve been pleased with the way PR continued to perform in Q4 and thus far in 2009.’
Sources familiar with the situation said that event marketing had been hit hard because of its short-term, project-based nature. ‘It’s easier for marketers to cut,’ said a source. Internal company events are also being cancelled because of widespread redundancies. Meanwhile, the event business is also hampered by exposure to the struggling automotive industry, and is an easy target for politicians to attack.
Sources noted that PR revenues, on the other hand, have held up because of growing demand for crisis counsel, and the longer term nature of retained accounts. Social media spend is also proving stable.
GolinHarris London co-MD Matt Neale added that his agency had delivered high single-digit growth in 2008, and had doubled revenues over the past three years.