IPG's Roth: Happy Days Aren't Here Again

by Steve McClellan, Jan 8, 2013, 8:08 PM

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From a business and economic standpoint, the legislation that Congress passed at the beginning of the year to address the “Fiscal Cliff” didn’t change much, according to Interpublic Group CEO Michael Roth.

“The overall economic environment is still the same,” Roth told an investor group Tuesday. “Everybody is still concerned with the debt ceiling challenges coming up.” Noting that IPG agencies are currently talking with clients about 2013 budgets, he said he wasn’t expecting clients to indicate that their attitudes about the economy have suddenly changed and that they’re “pleased and that happy days are here again.”

Roth made his remarks at the Citi Global Internet, Media & Telecommunications Conference in Las Vegas. He was the second holding company executive at the conference (Omnicom CFO Randy Weisenburger was the other; see related story in Media Daily News) to state that Congress’ action did not have much of an impact on the economy or the macroeconomic concerns of business leaders.

When asked to provide some specifics on the company’s fourth-quarter organic growth performance and the outlook for 2013, Roth demurred, citing the company’s “quiet period” before it issues Q4 and full-year 2012 financials.

Roth did say that heading into 2013 IPG does not have huge client losses from the previous year impacting its organic revenue growth potential, as it has had in the recent past. “For the last couple of years,” he said, “we’ve had headwinds of 3%” due to such losses." This year, he added, “we’re starting out on a level playing field so we can be competitive on the organic growth front.”  

Roth was also asked whether he had concerns about companies like IBM and Accenture providing state-of-the-art technology platforms to buy advertising and his response was no. “Our role is more than working with technology platforms, although we have to have expertise there to help clients navigate through it all,” he said. But agencies’ added value is about “the big idea” Roth said, “and distributing it among different media outlets and communicating with the consumer.”

“We may trip over each other on certain digital capabilities,” Roth added, but agencies drive value for clients by delivering creative ideas that connect brands and consumers. And while some consultants may try to do that, he said, “I doubt they will be successful.”

Roth also said he doubted that many clients would try to bring key agency disciplines in-house. “That’s very hard to do on a global basis,” he said.

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